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A Message From Kurt W. Whitesell, CFP®, President Thumbnail

A Message From Kurt W. Whitesell, CFP®, President

Insights

Dear friends, at Whitesell Financial Group, LLP, our top priority is and always has been the health, safety and well-being of our clients and their families.  Our ability to protect you and yours starts first and foremost with our own people, we aim to serve you.  We take this responsibility to heart, always.

According to the CDC,1 the recent coronavirus (COVID-19) outbreak has claimed almost 5,000 lives and impacted nearly 132,000 people worldwide as of March 12th, 2020 and it has also injected a sense of uncertainty into the markets. 

With that in mind, here are a few more things we want you to know:

  • We’re taking guidance from the CDC, we are initiating limited contact at our office for our client’s safety, our office continues to be cleaned and properly sanitized daily as a standard of our normal business operations.
  • Our staff will be ensuring that we are available by other meeting methods by utilizing the phone and computer-based Zoom meetings (Zoom is a company that allows us to share our computer screen with you over the internet securely). We are open and will be available during normal business hours 8:00 am – 4:00 pm Monday - Friday.
  • Your investments are designed to support your long-term objectives and needs. In situations like this, it is important to have perspective and remember that swift market decreases and increases are not unusual. Of course, the headlines can be scary, and fear of the unknown can be even worse. One of our most important roles as your trusted advisor is to not let the difficulties of the short term prevent the reaping of potential benefits of sound, long-term investing. Please let us know how you are feeling. 

A Brief History Lesson 

The market’s negative response to a health crisis is nothing new. The table below  shows that since 2003, approximately six months after early reports of a major outbreak, the S&P 500 bounced back by an average of 10.47 percent. After 12 months, it rebounded by an average of 17.17 percent. 

Epidemic

Month-end*

S&P 500 6-month performance

S&P 500 12-month performance

SARS

Apr. 2003

14.59%

20.76%

Avian (bird) flu

Jun. 2006

11.66%

18.36%

Swine flu (H1N1)

Apr. 2009

18.72%

35.96%

MERS

May 2013

10.74%

17.96%

Ebola

Mar. 2014

5.34%

10.44%

Measles/Rubeola

Dec. 2014

0.20%

-0.73%

Zika

Jan. 2016

12.03%

17.45%

Source: Dow Jones Market Data, cited on MarketWatch.com February 24, 2020. *End of month during which early incidents of outbreak were reported

Why is it important to look back in time? While there are no guarantees the current situation with COVID-19 will follow a similar pattern to the above epidemics, it helps us to better understand and put into perspective that historically over time, despite an epidemic, stocks typically regain their upward trajectory. 

What Should You Do? 

The answer is simple: Don’t panic and keep perspective. Defer large redemptions until markets recover, or if necessary, sell less volatile assets, ie. Cash and fixed income.

Acknowledge that financial planning is not just about the ups and downs of the markets – it’s about cashflow, strategy and duration. The virus and how it spreads are completely out of our control, but our reaction to the financial markets is something we can control. It’s not fun seeing your portfolio decrease in value, although we know market volatility is normal and expected. The key is to look at the long-term big picture. 

What We’re Doing

Our team is committed to helping you make informed decisions and sometimes, it means making no changes at all. 

We will leave you with one final piece of good news: sometimes, situations like this can create opportunities. For example, as prices drop, we will also seek out any opportunities to invest from your cash position, fund your IRA or convert IRA shares to a Roth IRA at lower costs, if it aligns with your long-term goals. 

If you have any questions about your specific situation, please contact us. We are here for you and thank you for your continued trust and confidence.

All indices are unmanaged, and investors cannot actually invest directly into an index. Unlike investments, indices do not incur management fees, charges, or expenses. Past performance does not guarantee future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poor's. 

 

CORONAVIRUS UPDATE:

Our office is open, however, we value your safety. Therefore, we will be limiting meetings in person. Our staff will be implementing Zoom and Phone Meetings. In the event that our office has to work remotely, we will still be available through our main line 605.348.1152 during normal business hours of 8:00 am – 4:00 pm.

 


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