“Historic Events”
The “Liberation Day” tariffs announcement should have been renamed Halloween Day because it was scary! Here is a timeline for April and what investors experienced.
April 2nd: Liberation Day announcement
April 3rd: – April 8th: the S&P 500 lost more than 12%.
Historic event #1: During this time, the S&P 500 experienced the fifth-worst two-day percentage decline since World War II.
April 9th: 90-day pause on the reciprocal tariffs for “non-retaliating” countries announced.
Historic event #2: S&P 500 has the best daily performance in nearly 17 years, with a 9.5% gain in one day.
May 2nd: The S&P 500 recovered all of the losses from the April 2nd announcement.
Historic event #3: As of the May 2nd close, the index saw its longest winning streak in 20 years.
So, we are right where we started, but as mentioned, it’s been a bit scary.
Regardless, a few observations still have my attention. First, the dollar is falling. This simply means that the amount of value that a consumer can purchase from another country has fallen because our currency is worth less vs. other currencies. This could be for many reasons that are unclear at this point. Is it a concerted effort by other countries to “sell America” or are other countries worried that the U.S. cannot fulfill her obligations or possibly both? I do not know but it is a concern I am watching closely and in addition to the tariffs, it will hit the consumer’s pocketbook when buying an imported good. This could negatively impact the economy in the short term and the depth of this rabbit hole is unknown.
On the flip side, I have most recently watched gold fall while the market rises. Again, the reason is unclear at this point. But I suspect this is a reflection that investors are not as nervous about the certainty or the effects of the tariffs and are more comfortable being back in the equity markets. It could also be the recent earnings season which was overall good or that market valuations reached reasonable levels in investors’ opinion.
At this point, I am afraid the verdict is still out. Soon enough, we may see more volatility as the tariff pause ends OR a deal is struck with major trade partners, namely India, Mexico and/or Canada. Notice, I left China off that list. If you need a second opinion on your investments or you have funds to invest and you’re not sure how or when to invest, give us a call for an appointment to discuss how we may be of service. 731-285-0097.
An Analogy: Fast food vs. A sit-down restaurant
Most recently I met with a prospective client. Typically, if someone calls in for an appointment that is not already a client, we ask, “please share with me the nature of the visit.” With that said, I knew why the gentleman and his wife were coming in, so I did my preparation and research on the subject before they arrived. When they arrived, they shared their situation, and I spent the next twenty minutes asking questions and listening. After our discussion, I shared with them how I could solve the issue, and I did so in easy-to-understand words. Much like this story, I even used an analogy to explain the concept. However, because of the questions I asked, I revealed another issue that had not been considered and if not dealt with, could completely negate the first issue.
After the appointment, I simply said, “I know this is a lot of information and much to take in. You will probably have more questions. Here is my cell phone. Should one of those questions pop up, simply give me a call. After you have decided how you would like to proceed, should you choose us, give me a call to set a follow up appointment at your convenience.” Keep in mind, at this point with preparation time and the appointment, I have two hours invested.
The wife immediately responded, “Let us go home to discuss but we will be back. I am so glad we came in to meet you. You have helped us tremendously.” Obviously, I was glad to hear that. We strive to do our best in advising, understanding and comforting clients. However, the story she told me after that made it clear. She explained that they met with another advisor the day before. The meeting was less than thirty minutes. The advisor used industry words and terminology they were not familiar with. The advisor never asked questions and certainly did not recognize the other glaring issue. Lastly, the advisor did not provide advice but simply told them what to do. Their experience was, in her words, “not worth our time”.
They shared with me who they had met with. It was not in person but rather over the phone. The firm was a large “national firm” with TV commercials that scare people into calling. Once they called, a salesman “qualified” them and set up an appointment with an advisor. I suspect that the reason the meeting was less than thirty minutes is that this “advisor” has thirty-minute calls set up all day and his/her goal is to close as quickly as possible, not to truly advise.
This was not the first time I had heard a story like this, and I gave them one of my favorite analogies. “I am a mom-and-pop locally owned sit-down restaurant. That group is a fast-food restaurant.” The point is, one is not necessarily better than the other. However, if you want cheap, fast, cookie cutter advice, that may be a good place for you. If you want customized, well thought out advice, where both parties take their time and that may (or may not) cost a little more, we may be the best fit.
If you feel like your advisor does not have time for you, that you get the same “model” that everyone else gets and/or you have a hard time communicating with him/her, give us a call. We would like to interview for the job of serving you!
Lunch And Learn Invitation:
In a few weeks we will be hosting a luncheon in our office for sixteen guests. Whether you’re a client, prospective client or just someone wanting to get good information, give us a call to save your seat. The title is, “Strategies To Avoid Entry Risk In Retirement”. Entry risk is probably something that you’ve never heard of or considered, but it is a real risk. Imagine for a minute that the day you retired was April 2nd of this year and your 401-k was still invested as if you were working. In a few days, the money you are counting on for a comfortable and certain retirement is down over twelve percent. When you add to this the distribution that you are going to make over the year to support you and your family, it is easy to see how the timing of the entry is important. At this luncheon we will share with you strategies to mitigate and in some cases, eliminate entry risk. IF YOU ARE RETIRING SOON, THIS WOULD BE A GOOD USE OF YOUR TIME. Even if you are not retiring soon, if you expect a lump sum of money such as an inheritance or sale of a business in the future, this thirty-minute presentation will help you to properly invest your funds when the time comes.
Date: Tuesday, May 20th
Time: 12:00 Noon
Place: Davis Wealth Services, 575 Mall Blvd. Suite C Dyersburg TN 38024
To reserve your seat(s), please call: 731-285-0097
Feel free to invite a friend or family member and please share this information with someone that you think may benefit from the subject matter.
We are hosting other lunch and learn presentations in June and July with more information to come. Stay tuned.
Until next time, Cheers!
