April 14, 2020

 

We have all lived through a lot of change these past few months because of the coronavirus. Over the course of this coming year, the world will return to everyday routines, albeit with some differences. Some of us will be getting on airplanes for long-overdue visits to see family, though we may keep doing weekly FaceTime calls with loved ones. Many of us will be back in the office, though likely doing some virtual calls with clients now that it seems everyone is using Zoom. We can even look forward to a time when we have to wait 30 minutes for a table at our favorite restaurant, though we may occasionally still order DoorDash, too. The world will be a different place, but there will also be a lot of similarities to our pre-coronavirus lives as well. As routines return, eventually so will the economy.

Throughout the first quarter of 2020, many days of extraordinary volatility happened with regularity. The first half of the quarter saw all-time highs in the U.S. stock market coupled with low unemployment. The latter half of the quarter saw the spread of COVID-19, the effects of which have rippled through the world economy as many countries have issued lockdowns or stay-at-home parameters to slow its spread. In response, governments and central banks have deployed stimulus packages and monetary policy tools to curtail the effect the coronavirus has had on world economies and financial markets.

The global financial markets witnessed volatility not seen since the financial crisis in 2008–2009, with the U.S. stock market falling 20.0% from January 1 through March 31. Of the 62 trading days in the quarter, 11 days had losses of more than 3% and eight days had gains of more than 3%.1 It is important to remember that bear markets historically only account for less than 20% of the days in U.S. stock market history. Stock prices will fluctuate but the volatility associated with the coronavirus should not stipulate a change in course. The volatility we have experienced is shown in the chart below, detailing the daily performance of the major U.S. market indices through the first quarter of 2020.

Many areas in fixed income markets have performed well during this turbulent first quarter. For example, long-term government bonds were up 20.4% from January 1 to March 31.2 We hold these bonds in high and moderate equity portfolios as they historically have performed well when equities have not, and that remained true in the first quarter. Through rebalancing, client portfolios have been able to capture these gains and reallocate them to equities at cheaper levels. That is one of the benefits of a well-diversified portfolio.

Investors have once again been challenged to stay disciplined and buck the notion that it is different this time. On the surface, it might be difficult to consider any 20%+ drop “normal” but so far this market downturn does appear to be normal in terms of the market reaction. Markets are functioning. Unlike 2008, there is no breakdown of the fundamental building blocks that make up our financial systems. The chart below illustrates previous financial crises and the subsequent portfolio performance one, three and five years after.

Your long-term plan was designed to withstand market downturns and has been acting accordingly throughout the current market crisis, such as rebalancing your portfolio during the first quarter of 2020.

It is our belief that we will persevere if we all work together and adhere to our thoughtfully designed plans, whether goals are financial, personal or a combination of both. With every goal, we are there to support you. Please contact your advisor if you have any questions about the markets or your portfolio.

Sources

1 U.S. stocks as proxied by the S&P 500 Index.

2 Long-term bonds as proxied by iShares 20+ Year Treasury Bond ETF. The proxy tracks investment results of the ICE U.S. Treasury 20+ Year Bond Index.

Meet With Your Advisor

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.

 Copyright © 2019 by Forum Financial Management, LP

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.

© 2018 Legacy Wealth Management Group Las Vegas LLC.

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