Broker Check

Monday Money Report

| April 20, 2020

The markets were up again last week. The S&P 500 was up approximately 3%.  Given everything going on, you might wonder how this can be possible.  Remember that the markets are forward looking.  Based on pushes to reopen parts of the economy, positive news from small trials of coronavirus treatments, and better-than-expected earnings reports from some companies, the markets continue to recover. 

Most big, publicly traded companies have still been operating, and some, like Proctor & Gamble, are seeing record earnings.  It’s the small businesses that are bearing the burden of this, and their now-unemployed workers.  Assuming we can begin to reopen within the next 6 to 8 weeks, we still expect a dramatic “V” shaped recovery for the economy as a whole.  Even so, many small businesses will not be coming back.

On a personal level, it seems most people are either business as usual, or at a full stop.  For essential workers and those who have been able to shift to telework, life is much the same financially. If you’re in this camp, I would encourage you to continue to build cash reserves, and, as much as possible, support your community.  Purchase gift cards for small businesses, donate to some of the amazing non-profits that are feeding the hungry, or supporting local restaurants by using donations to feed health care workers and first responders.  Arts groups and museums are also struggling.  And if you’re a member of a church, temple, or other religious group, remember that they still need to pay their bills.  If you are still working, keep contributing to your retirement accounts.  You are buying low right now.  Which always feels like eating cold, mushy green beans.  Absolutely awful, but still really good for you.

If you’re in the group that has been laid off, had their hours cut, or are otherwise wondering how you’re going to make ends meet, take advantage of all the programs that are available to you.  Federal student loans are in forbearance for six months. Call your mortgage company to see about forbearance on your mortgage. Utilities in Maryland are under executive order not to cut off services, and landlords are not able to evict tenants.  That doesn’t mean you should not communicate.  Reach out to your landlord, mortgage company, credit card company. 

If you are fortunate enough to have retirement funds, the CARES Act has provided you with the ability to tap into these funds and even pay back distributions you take now. While taking money from retirement accounts should always be a last resort, in these times you do what you need to do to survive. Please reach out to a financial professional to discuss your options and strategize about the best way to use retirement accounts.

If you are receiving unemployment, remember that unemployment payments are fully taxed. If you have the means to do so, please have them withhold taxes, or put aside a part of each check to pay the taxes you will owe next April. If paying those taxes now means your family isn’t eating, then do what you need to do to get by, and you can set up a payment plan with the IRS next year.

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Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. CovingtonAlsina and Great Valley Advisor Group are separate entities from LPL Financial.

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investment(s) may be appropriate for you, consult with your attorney, accountant, and financial advisor or tax advisor prior to investing.

And if you don’t have a financial advisor, or you haven’t heard from yours, come talk to us. This is Ann