It’s remarkable what has happened to the stock market in the last few weeks. In March, we were all concerned about a major economic slowdown, and phrases like “Economic Depression” were commonly used. Since the S&P 500’s low of 2237 on March 23rd,2020, we have seen a recovery rally that seems to imply the worst is behind us. Frankly, it’s too soon to confidently agree. We have one primary goal as your financial advisor and fiduciary, and that is to represent the objectives we developed in your financial plan as the foundation of how we deploy and manage your investment assets. It’s a simple statement, but one we take very seriously. In this month’s Guardian Standard, we discuss the Economy and the Fed, share another chapter of our “This Is Life” series, and discuss new cyber scams and how to protect yourself.

The Economy & The Fed

As expected, the Federal Open Market Committee kept policy unchanged but stands ready to do more if needed. It kept the fed funds target range at 0% to 0.25% and expects rates to remain at the effective lower bound at least through 2022. Lower interest rates are needed for the foreseeable future.
 
There is a wide range in economic outlooks available on the internet and in the research we read. Ned Davis Research (NDR) has written “The US economy (US GDP) is expected to contract 6.5% this year and rebound 5.0% next year and 3.5% in 2022. The unemployment rate is projected to fall to 9.3% this year, decline to 6.5% next year, and 5.5% in 2022.”

A broad array of the global economic indicators that NDR watches closely point to tentative signs of the global recession ending fairly soon. Their analysis of the lead times of economic and market-based data suggests a recovery in early Q3. Despite these green shoots, most economic data remains at historically depressed levels, indicating a long road until pre-COVID GDP is restored.

It is our role as your Financial Advisor to assess how we navigate this environment while taking into consideration your personal goals and objectives as outlined in your financial plan and/or the investment model we have agreed to utilize with your input. We believe an approach that is thoughtful, pragmatic, and cautious is appropriate until we have more clarity of the economic consequences of COVID-19 and the quality and strength of the current recovery.

This Is Life 

In this section, we usually share examples of how clients, friends, family and investors are experiencing life, and hope all of us gain a little perspective and appreciation for where our respective lives might be today. It is our hope that by sharing these experiences and continuing to communicate and learn from each other, we can make some sense of all that is happening day to day around us. Although this month’s “This Is Life” is shorter than prior months, we believe our message to you is more relevant than in past editions. Let’s all ask ourselves a very simple question – “What can each of us do to contribute to a solution, and to help our country, our families, our friends, and even strangers heal?” For myself, I have taken time daily to ask a stranger “How they are doing and coping?” and then I simply listen. Truth be told – I am getting far more from the conversations than the simple act of showing sincere concern. More importantly, we will all get through what is happening around us and be better and more grateful for what we have in our lives.

Protect Yourself

With the arrival of Coronavirus, there has been an emergence of new scams targeted to take your identity. Cybercriminals use the fear of the disease to prey on you through readily accessible information and “help” delivered to your inbox or through a text message. The same is true when it comes to your “economic impact payment” from the recent passing of the CARES ACT.  Many scammers are using it as an opportunity to send emails or texts that offer quick access to your money. Or make it seem like they are sending you a necessary step to get your money. The reality is the government doesn’t email or text regarding these matters. Another clue is the Internal Revenue Service has stated that the official term for payments is “economic impact payment.” If you receive any correspondence using the phrases “stimulus check” or “stimulus payment,” it may be a clue that a fraudster is trying to take your cash. The best defense to all this is to be aware and don’t click. Norton (the anti-virus company) has a great summary of these scams with real examples. You can view it here.

We are here to help and offer objective advice. If you would like to discuss any of these topics or any questions relating to financial planning and/or our view of the markets, please click below and pick a time on our calendar. Click here to view our calendar.