March 13, 2020

When we consider the historical performance of the U.S. stock market, the data tells us that the greatest rewards to investors have often come after the largest declines, but it requires investors to remain invested through some very difficult times to attain them.1

The global financial markets experienced further declines this week as new information confirmed the spread of the coronavirus across the United States. Markets have been incorporating that information into lower market prices while reflecting additional uncertainty about the financial impact of the coronavirus on companies and the personal impact on our daily lives. While this type of volatility can feel unprecedented, such periods happen frequently when we examine nearly 100 years of historical data.2

In fact, even very recent market history offers several examples. Looking back at 2008, investors will likely remember that markets dropped by almost two times what has occurred so far this year, but what is often forgotten is that there was a H1N1 pandemic in 2009 as well. From April 2009 through April 2010, that flu virus affected more than 60 million people in the United States.3 Yet, in 2009, the market recovered significantly. It should be noted that the coronavirus is not the same as the H1N1 flu virus, as the severity and fatality of the coronavirus is higher. In today’s economy, we do not have the same financial and liquidity strains we were experiencing more than a decade ago.

The exhibit below displays the history of stock market downturns of at least 10%, each of which involved “unusual” market volatility and the subsequent market performance.

Investors best position their portfolios to successfully capture a recovery by adhering to their written financial plan. Investors who do not remain disciplined and investors who do not have a plan risk locking in the downturn and missing out on the eventual portfolio returns from a recovery if they choose to react emotionally.

In the 2008 video “Why You Stick Around in a Tough Market” that describes why going to cash results in a poor outcome, David Booth, founder of Dimensional Fund Advisors, reminds investors that they should expect higher potential future returns because of the increased risk premium in the market. The story from 2008 is equally relevant today and what Booth discusses in the video proved true in the coming years.

https://videos.dimensional.com/share/v/1_gyyexmf6

As the coronavirus continues to affect the United States more directly, please know that we are here for you as you focus on the health and well-being of your family. We would ask that you trust us to keep your portfolio invested, so that you will capture the beginning of the recovery whenever it may begin.

 

Sources

1 “US Equity Returns Following Sharp Downturns.” Dimensional Fund Advisors, March 2020.

2 Ibid.

32009 H1N1 Pandemic (H1N1pdm09 virus).” Centers for Disease Control and Prevention. Page Last Reviewed: June 11, 2019. Accessed March 12, 2020.

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It is important to let us know when you have any changes in your investment objectives or financial circumstances. It is also important to review your account beneficiaries each year to make sure that no personal changes need to be made and the primary and contingent beneficiary designations are up to date and accurate. To notify us about any such changes that have occurred since we last met with you, please contact our office and schedule a meeting with your advisor.

We look forward to helping you stay on course.

 

Greg Feese, CRPC®
Financial Advisor

PR Wealth Management Group, Inc. a Registered Investment Advisor, doing business as Legacy Wealth Management Group of Las Vegas, LLC.  PR Wealth Management Group, Inc. only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements. PR Wealth Management Group, Inc. and Legacy Wealth Management Group of Las Vegas, LLC. are not affiliated companies. The home office is located at 990 Avenue of the Cities, Suite 4., East Moline, IL. 61244. The Las Vegas branch is located at 8235 S. Eastern Ave. Suite 160., Las Vegas, NV. 89123. Before making investment decisions please call our office at 702.545.0680 to receive a copy of PR Wealth’s Advisory Agreement and Form ADV Part 2A, which includes PR Wealth’s fee schedule. This information is intended to serve as a basis for further discussion with your professional advisors. Although great effort has been taken to provide accurate numbers and explanations, this information should not be relied upon for making investment decisions. Web: www.Legacywmglv.com

Forum Financial Management, LP is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability. The home office is located at 1900 S. Highland Ave., Suite 100, Lombard, IL 60148. Before making an investment decision, please contact our office at 630.873.8520 to receive a copy of Forum’s Advisory Agreement and Form ADV Part 2A, which includes Forum’s fee schedule. This information is intended to serve as a basis for further discussion with your professional advisors. Although great effort has been taken to provide accurate numbers and explanations, this information should not be relied upon for making investment decisions. web: www.forumfin.com

Information is used with the express permission from Dimensional Fund Advisors. Dimensional Fund Advisors is an investment advisor registered with the Securities and Exchange Commission. Consider the investment objectives, risks, and charges and expenses of the Dimensional funds carefully before investing. For this and other information about Dimensional funds, please read the prospectus carefully before investing. Dimensional funds are distributed by DFA Securities LLC.

Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. All investment strategies have the potential for profit or loss. Historical performance results for investment indexes and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results. There are no assurances that a portfolio will match or outperform any particular benchmark.

Nothing in this publication should be construed as investment advice. All information is believed to be from reliable sources; however, its accuracy and completeness and the opinions based thereon by the author are not guaranteed and no responsibility is assumed for errors and omissions. Any economic and performance data published herein is historical and not indicative of future results. All rights reserved. Please consult your personal advisor and investment prospectus before making an investment decision.

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Legacy Wealth Management Group

Greg Feese CRPC®, Investment Advisor Representative.  Advisory Services offered through PR Wealth Management Group, Inc., a Registered Investment Advisor. PR Wealth Management Group, Inc., a Registered Investment Adviser, doing business as Legacy Wealth Management Group of Las Vegas, LLC.  PR Wealth Management Group, Inc. only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements. This is not a solicitation for sale of securities in any jurisdiction.. The investment advisory representatives referred to on this site may only transact business, effect transactions in securities, or render personalized investment advice for compensation, in compliance with state registration requirements, or an applicable exemption or exclusion.

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