I hope some of the emotions that we all have been experiencing since the COVID Crisis began in March, are beginning to subside. While there are a lot of “opinions” being spouted by “professionals” in both the medical and financial industries about what has happened and will happen going forward, the bottom line is these are only opinions and speculations at best. While there continues to be fall out, think unemployment, from the crisis the reality is pandemics in the United States that have caused closures for extended periods of time, have never happened to this magnitude in our lifetime. For “talking heads” to provide information as if they know the truth, is only speculation. As advisors, we look back at history to find similarities to be able to draw conclusions. When we identify events in history that seem similar, we project those outcomes forward as likely to occur again, although not guaranteed. In this case, dealing with events that are being created and evolving daily for the first time in history, it is difficult to draw any conclusions. Thus, opinions and speculations as truth, become the norm. Whether this information is fact or fiction, only time and the data points that have been collected, will know for certainty. However, as is typical in historical events such as this, there will be many investigations and finger pointing to go around.
The media is supposed to provide “unbiased” reporting. Today, if you have a Facebook, Twitter, or You Tube account, even without designations and credentials, you can share your opinions on a vast platform that goes beyond national borders. With so many opinions and depending on where you get your news feeds from, very rarely are they in full agreement. Many times, there are arguments on completely opposite ends of an issue. Some of these outlets and individuals only exist to contradict or comment on another person’s thoughts. Listening to the radio in my car, there is a channel with “doctors” sharing opinions as guests about every 30 minutes regarding COVID. One doctor was on with an opinion that all the states should open rapidly and get the economy back up and running as quickly as possible. “Social distancing is not healthy for our immune systems or mental health”. The next guest was a doctor that said that the states should continue to be closed through the end of the summer at the earliest. “Rapid return to a work environment would escalate the number of COVID cases and could cause another national shut down”. With all these contradictory opinions, we are left to do the best we can to identify the TRUTH. We all want, need, and should be able to expect unbiased information as we desperately want to make the best decisions for ourselves and our families. However, doing that has gotten so complicated with all the “noise” of people’s opinions versus data and the facts. Which takes longer than many of us have the patience for, to truly compile and analyze.
Add into this debate, that we gradually have become a population that is more skeptical than trusting yet we all want to know the “truth”. As a young kid, my parents never gave me a key to our home. The doors were almost always unlocked. Many of our neighbors did the same thing. My parents told me if a stranger ever tried to do something to me, to run to the closest home and open the door. You could drive up to a convenience store to run in and grab a few items, leave the car running and your young kids still inside. We were able to take people’s word at face value and were more trusting of corporate America and the government. While the candidate you voted for may not have been elected, you still supported the President. Maybe I was too young and naïve to know the difference. Now, things that were once very black and white, have gradually become more “gray”. People justify their lies and very few have absolute faith and trust in our politicians in Washington to “do the right thing”. Even in times like this that demand nothing less than the “right thing” be done. Through this pandemic, employers and the medical communities have encouraged people to stay home if they are sick. Yet, there are stories of employers taking their employees temperatures before they enter the office. Being cautious is not a bad thing. However, it certainly seems to show a lack of trust if this is the price of entry.
Legacy Wealth Alliance is not immune to these issues, nor is our industry. Many of you hear stories of people being taken advantage of by financial advisors, more than professional relationships in this sector that are a success. Last week, one of our clients called about refinancing her mortgage. She got a call from a global bank that promised “no fees”, a reduced payment, and she would save about $14,000 in interest. Sounded like a no brainer. We recommended she ask for a Good Faith Estimate (GFE) and an amortization schedule. Upon requesting these items from her salesperson, she was told they do not provide those documents. The following day, they were in her email box. Reviewing these documents, we discovered the costs were close to $5,000, the rates were higher than competitive mortgage rates, and the $14,000 in committed interest savings, was going to end up costing her an additional $10,000 out of pocket over the loan term. I am thankful our client provided us those documents to confirm the promises that she was being told. What happened to character, integrity, ethics, and do unto others as you would have done to you? Why is putting the best interest of the clients they serve over themselves or the companies they work for so difficult? If only this salesperson had taken more time to ask the right questions, understood her objectives, her income and net worth, they quickly should have been able to surmise, as we did, this definitely was not in her best interest. And only appeared to be in the best interest of an individual trying to make a sale. Is it any wonder that we have become less trusting and more skeptical and cynical?
The markets took a bit of slide last week with most of the stock indexes showing losses for the week ending 5/15/2020. The Dow was down -2.60% and the S&P 500 was down -2.20%. With these losses, it pushed the S&P 500 Index back into double digit losses, -10.70% for 2020. 1 Yesterday, 5/18/2020, both indexes posted their best days in over a month. The Dow was up 911.95 points or 3.85% for the day. There was news released yesterday that a company had success with a potential coronavirus vaccine and were hoping to have government approval by year’s end. The S&P 500, despite last week’s slide, continues to climb out of it’s year to date low on March 23, 2020 closing at 2,237.40. On Monday, May 18, 2020, it closed at 2,953.91. 2 That is an increase of 32.02% in less than 2 months. While the market has recovered some of the losses sustained since the February and March negative volatility, both indexes as stated previously are showing losses thus far for 2020. We still believe in investing over the long-term in the markets. As we have shared, there are still bumps in the road to come and we expect these triple digits days, both positively and negatively to continue. We are hopeful as more states begin the process of re-opening, and the state, national, and global economies get back to business under the “new normal” that more positive results can be accomplished.
On a personal note, and as I have shared with you, my middle daughter Tori is a senior and graduating high school and, fingers tightly crossed, going to college in the fall if her school stays open. She has not gotten to experience multiple rites of passage, that many of us took for granted. Prom and her senior trip to Hawaii were cancelled and her actual graduation is not looking good. When I left for work this morning, she was awake, which never happens. She heard that Krispy Kreme donuts was offering a free dozen donuts to graduating seniors. Want to guess how that turned out for her? Yep, they were out of donuts by the time she arrived. My heart breaks for her that she had done “without” a lot in 2020. It has been difficult for her, us to watch, and help her cope the best we can with all of it. Tomorrow, May 20th, my baby turns 18 years old. She announced this morning, she will now be an “adult”. The best part of her birthday, by far, is her Mom built a book of memories. She asked family, friends, teachers, neighbors, employers, and anybody that Tori thought highly of over the last 18 years to write for Tori’s book. I lost count of the responses we received, but it was overwhelming. Only the great mothers, which Tori has and I married, know how to turn the not have’s into something very special. We are so fortunate to know some wonderful people that understand that and responded to help make Tori’s day THE BEST. A memory she will have forever. Tori, Happy 18th Birthday Sweetie. Your Dad is very proud of you and loves you very much.
Thank you for continuing to be part of this journey with us reading our content every week. Our purpose has to been to provide perspective on what is happening with COVID and the financial markets in breaking through some of the “noise” that you may be hearing. We also wanted to encourage you and your family, as we all strive to figure this out. In our humble opinion, if you have investments of any kind or amount, we are very fortunate and blessed. We have been and will continue to remain open on whatever you need and in whatever capacity we can help. Thank you for your continued business, relationship that we share, and faith and trust in our abilities to help you reach your financial goals. We will continue to work hard to maintain that valued position, in every interaction and experience you have with us.
Todd C. Martin
LFS-3095463-052020
1 Amundi Pioneer Market Monitor. Past performance does not guarantee future results.
2 Yahoo Finance
