Charting a Path Forward

While many of you have a little (or a lot of) extra time on your hands right now, let’s think about what advice you would have given yourself one year ago if you knew a global pandemic was going to hit at the beginning of 2020. You could also view this advice as the proverbial Monday morning quarterback who always has a solution to the problem after it has occurred. But what if this Monday morning quarterback is only one-quarter of the way in to the game?

The total economic fallout from COVID-19 is still very much unknown. Information and public policy on opening up retail, civic, and public spaces is not a coordinated effort nor is the method of implementing it agreed upon by our private and public leaders. And while we all want to get back to what was perceived as normal, it may be too early to tell if we ever will get back into the same ideology of social and family life that we once knew.

That leads us into the next discussion of investments and the economy. Who, other than your trusted advisor, are you talking to regarding investment advice? The stock market and publicly traded companies will always have a market for trading regardless of economic conditions. The same goes for the bond market, real estate, oil, gold, and all other asset classes. Private investments also will always have a market for those inclined to speculate and invest. How is someone to choose where to invest when so much uncertainty remains from this current pandemic? Has anyone suggested that you invest in airline stocks, plunging oil futures, gold, or going to cash? Are you sitting around hoping that the market is eternally rebounding from the March 23 low? 

Not a single person in this world, not even Warren Buffet, knows the direction of tomorrow’s market of any asset class. Anyone who professes to know what is going to happen in the market, what direction it will go, or when it will occur, is going to have some serious issues. McKinsey & Company just published a report comparing the economic effects of this pandemic to prolonged wars…specifically, WWI or WWII. To compare our current condition to the great world wars means that we are all in for a possible long and uncharted bumpy ride for the foreseeable future.

Clients and friends frequently ask me for my thoughts on where we are headed and what we should be expecting. As a fiduciary (required as a practicing CFP®) who puts clients’ interests first, I address each answer with an honest response that is based on each person’s timeline—the length of time until they need to access their money–and how much risk they wish to endure. These are the basic tenets of investing today – just as they always have been. Furthermore, as a fiduciary who does better when the investor does better, our interests are aligned.

Finally, what is more important than investing, the accumulation of wealth, and/or preservation of assets, is your physical and mental health. You must remain mentally and physically healthy in order to benefit from any financial decisions you make today. Becoming sick and confined to a bed or institution makes the possession of money and wealth irrelevant. All the money in the world isn’t worth a dime if you cannot use or enjoy it. I encourage everyone to put their family’s health as a priority over everything else. For everything else, we can discuss and prudently plan on how to manage it.

Securities offered through Securities America, Inc. Member of FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Arktos Wealth Management and the Securities America companies are separate entities.