April 9, 2020
In the past month with our nation’s economy, the world economy, and your investment values have taken a major hit. Most of the financial damage was done in a very short 2-3-week period. This is very representative of the fact that when markets move, they move very quickly. It’s also illustrative of why we have to ALWAYS buy quality and remain long-term investors. You see long-term investors aren’t affected by rapid, sharp drops. Long-term investors recognize that historically, their recoveries from these types of pandemic events are equally rapid and sharp.
An example of a sharp recovery is that from the market’s low point on March 23, 2020, our client accounts have appreciated over 25%! So the damage we saw during the month of March is rapidly being erased by the tide of economic history – and the virtual tsunami of stimulus that continues to grow even today, when the Federal Reserve added another stimulus program that infuses the economy with an extra $2.3 trillion dollars!
It is our firm belief that the coronavirus pandemic is now beginning a downhill slide. While peak deaths are likely to climb short-term, the number of new hospitalizations should continue to decline. Social distancing is not a fact of life, despite what we hear from media pundits and others with a political axe to grind. Our country should be back to life as usual, perhaps with minor changes (like handshakes), within a relatively short period of time.
Remember that the equity markets anticipate the underlying economy’s movements and that while our economy is still in contraction, the equity markets are already looking out 6-9 months (on average), to anticipate what the economy’s movements will be at that point. It is our belief that in the next 6-9 months, our economy will have completely recovered the ground it lost over the last month and a half and will move strongly beyond the old equity market highs. We believe this is inevitable given the unprecedented level of government and Federal Reserve stimulus being thrown at this pandemic. It is nearly incalculable how much extra growth resolves out of the tsunami of cash daily being infused to our economy and providing for the income needs of our nation’s workers. The dawn is already here with the coronavirus. The sun is beginning to rise, and hope is igniting. Keep the faith, both in a benevolent Creator and in the economic history following all past pandemics. We always have won, we always will win, and there will be an even brighter day than we saw at the economy’s peak in February. Please feel free to give me a call at (859) 223-6333 if you have any questions whatsoever about your account and know that our firm will ALWAYS put our client’s first and look out for you! God Bless.
C. Kelly Buckley, MBA, CFP®
Managing Director for Asset Management
Spectrum Financial Alliance, Ltd., L.L.C (“Spectrum”) is a Registered Investment Advisor with its principal place of business in the State of Kentucky. Spectrum and its representatives are in compliance with the current registration and notice filing requirements imposed upon Registered Investment Advisors by those states in which Spectrum maintains clients. Spectrum may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. Use of various indices in Spectrum’s account performance report is for comparative purposes only. We believe the results of the indices contained herein to be accurate, but we cannot guarantee the accuracy of such information. The volatility of the indices may vary due to diversification and/or other factors. All performance results shown are net of Spectrum’s management fees, which vary from 0.9% – 1.50% per annum (as disclosed in Spectrum’s Form ADV Part 2). Fees may be negotiable based on many factors including potential referrals, relationship to a current Spectrum client, future likely additions to the account, etc. The performance results also reflect the reinvestment of any dividends, capital gains, other earnings, and the subtraction of applicable fees. Spectrum does not make any representation that client accounts will or are likely to achieve returns similar to those shown above. Clients and/or prospective clients should understand that PAST PERFORMANCE MAY NOT BE INDICATIVE OF FUTURE RESULTS. For additional information about Spectrum Financial Alliance, including fees and services, send for our disclosure statement of Form ADV Part 2 using the contact information herein. Please read the disclosure statement carefully before you invest or send money.