Turbulent Times
It's been quite the start to autumn. The COVID-19 pandemic rages nearly unchecked, no one knows where the stock market is headed, and another consumer stimulus package has stalled in Congress.
With record numbers of Americans filing for unemployment and many facing income loss, the financial impacts of COVID-19 are far-reaching.
One of those effects has been unexpected, said Wendy Bennett, senior financial adviser and portfolio manager at Bennett Associates Wealth Management, 122 S. Washington St.
“Our clients are saving a lot more money,” she said. “Most people I'm talking to are working from home, and they are taking advantage of the COVID restrictions. They are not eating out. They are not shopping. They are not going to the hairdresser.
“They are accumulating funds as a result. Of course, there is a lot more online shopping,” she said.
Bennett noted a lot of people have lost their jobs or seen their hours reduced.
But up until recently, there were programs to boost unemployment benefits.
And, Bennett added, the stock market has been through the quickest recession and recovery in history.
“People were thrown for a loop by the stock market,” said Bennett. “But it's recovered for the most part.
“There's still volatility. The markets have recovered quicker than the economy,” she said.
But that could be a good thing, she added. The stock market recovery could be an indicator investors are optimistic about where things are headed.
Other investors have been optimistic all along, according to Howie Pentony, founder and senior financial adviser for Pentony Capital Management, 1284 Perry Highway, Portersville.
“As strange as it may seem. My clients have had their portfolios ready for something like this,” he said. “We use asset allocation to determine how much of a risk they are willing to take,” he said.
He calls it creating an “all-weather” investment strategy.
Pentony said his clients' portfolios are divided among stocks, bonds and alternative investment based on what level of risk his clients are comfortable taking on.“It's easy to figure out what percentage of stocks to own,” Pentony said.“There's always been a reason not to invest, World War II, the coronavirus,” he said. “You have to be thinking long term. This is not the time to be thinking short term.”Pentony said, in his opinion, there is nothing in particular investors should be doing different right now, other than making sure their portfolios contain the amount of risk that is acceptable to them.He said he took one phone call from a concerned investor during the pandemic.Pentony said he makes it a point to email his clients at least three times a week to keep them informed.Of course, another cloud on the financial horizon is November's presidential election and what may come in its aftermath, said Bennett.“The upcoming election is on the top of everyone's minds,” she said. With the federal government borrowing so much money to fund pandemic relief, people are worrying about tax rates and tax policy in the future.For retirees, Bennett said, they need to carefully consider one of the provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed to help Americans cope with the unprecedented financial fallout from the COVID-19 outbreak.
Retirees are able this one time to defer taking their required minimal distribution for 2020 from their retirement accounts, she said. If they can do without the money, that might be an attractive option.Both Bennett and Pentony suggest the best investment strategy is the one that was working before the pandemic and economic meltdown gave the public a one-two punch this spring.“Stay the course,” said Bennett. “This is a long-term commitment. The market almost always bounces back.”
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