compass, newspaper, finance

July 2020 Quarterly Market Overview

Share on facebook
Share on twitter
Share on linkedin
Share on email

Wow! A quarter to remember! After the market had its fastest selloff ever from a market high to a bear market, the reversal took hold in the 2nd quarter. A bear market is defined as a 20% pullback from a previous high. Interesting to note, this bear market replaced 1929 as the swiftest on record.

Let’s take a look back and then discuss where we go from here.

In our video commentary on March 12th, we said we expected a quick reversal as the speed of the recovery often correlates to how fast the market came down. We encouraged our clients not to panic in that you have to risk that you’re not at the bottom, so you are there when it turns. Quick market selloffs usually lead to a V-Bottom as an emotional selloff usually reverses back to the upside in a reasonable amount of time. We indicated that in hindsight, the market selloff may be viewed as an opportunity.

Our March 17th video reminded us that the market always overreacts. We also discussed that an event- driven bear market would likely lead to a faster recovery. Another reason to have expected a quicker recovery is that the selloff started from a time when the economy was strong.

The market finally bottomed on March 23rd and we put out another market commentary video on that day. We discussed how the market does not like uncertainty, but the certainty was that we will recover. We always have. Economic stimulus was on the way in the form of monetary stimulus from the Fed and fiscal stimulus from the legislative branch. We used this opportunity to make changes to our investment strategies to add diversification and improve quality. Even higher quality stocks were selling at very reasonable valuations.

In our video on April 16th, we said we believed that the level of panic we had witnessed was a good sign that we had seen the market bottom. The “baby had been thrown out with the bath water” so to say. We also reminded that the market, as a leading indicator, can recover as much as a year ahead of the economy itself.

In our most recent market update, we warned about the potential for more volatility, but overall, expected the recovery to continue.

So where do we go from here?

The speed of the market recovery has been amazing. In fact, it has acted more like a recovery from a normal market correction than from a bear market. A correction is defined as a pullback of 10%+ from a market high, and the market typically recovers in three or four months. A full recovery from a bear market is historically about two years. We did expect a quicker recovery since it all started from a time of a strong economy, and event-driven bear markets recover faster. However, we have even been somewhat surprised at how fast this market reversal has been.

We do believe a market pause is not unlikely, and the market may be a little ahead of itself short term. However, we do not believe there will be much downside when the next scary moment arrives for the following reasons. First, the amount of stimulus thrown at the economy both by the Fed and the legislative branch has been unprecedented. Also, with the anticipation of more to come, this puts a bit of a floor under the market. Second, there is simply little competition for stocks. Let’s look at bonds for example. Interest rates are so low that there is extreme interest rate risk if rates were to rise. If one bought a 10-year US Treasury bond currently paying about .65%, a rise in rates to just 1% could create over a 30% loss if the bond had to be sold in a higher interest rate environment.

We remain intermediate to longer term bullish. Shorter term, we still expect more volatility and maybe even some scary moments. Recently on June 11th, the DOW fell over 1800 points, but as of today, it has again recovered. There is still a lot of uncertainty. We remind our clients to think six months or more out and the market, and our economy, will be fine given time.

On a personal note, with the recent spike in coronavirus cases in many States, continue to take care of yourself and those you love. We will get through this trying time together. New therapeutics are helping people recover faster and a potential vaccine may be on the way. For now, stay vigilant and practice the habits that can keep you safe.

The post Quarterly Market Overview appeared first on ROYAL Fund Management.

Want To Learn More?

Financial education is at the heart of all we do.  Check out all of our financial education resources.

Want To Get Started?

Our goal is your happiness and success. We’ll be here to help you retire with purpose on time.

“Investment Adviser Representative of and advisory services offered through Royal Fund Management, LLC, a SEC registered investment adviser.”

When to Claim Social Security

Get Started Today

The Triplett-Westendorf Financial Group Difference

Commitment & Discipline

When you work with us...

we help you structure a retirement income plan that reduces stress and anxiety so you can enjoy life in retirement. Through your commitment and discipline and the Triplett-Westendorf Financial process, we’ll help you identify any weak areas, define priorities, and build a stronger, clearer, more precise plan to achieve financial success.

We introduce you to financial strategies...

that you need but may not have heard of from other firms. Then we show you how to use those strategies to effectively maximize your retirement savings because you deserve the clarity, transparency, and comfort of owning a guaranteed retirement income that lasts as long as you do.

Income You
Can Count On

Ways You Benefit

Get your arms around your financial life...

once and for all when you work with us. After we take an inventory of your resources and goals, you’ll have clearer picture of where you are, which is essential to achieving the retirement you’ve worked so hard for. Along the way, we’ll answer your questions, educate and empower you to take charge of your financial affairs. Together, we’ll take the worry out of your money.

We Always Place You, the Client, First.

Organization

With us, you’ll get your arms around your financial life. We’ll do this together by taking a detailed inventory of your resources and goals.

Partnership

Our team gets to know you, and you get to know us. We work together every step of the way to make sure that your future is financially sound.

Objectivity

Hope is not a strategy. We work to clearly understand your goals and craft a plan that focuses on realistically meeting those goals.

Education

We find that informed clients are successful clients. You get answers to your questions and an education that will empower you to take control.

Proactivity

We are always looking forward to find and implement new strategies for you. We feel the best results are when we are ahead of changes, not reacting to them.

Accountability

We give you the clarity and transparency you deserve. We build your plan with your goals in mind and keep you involved and informed at every step.

You Should Know How
Triplett-Westendorf Financial Group Is Compensated

Folks seeking financial planning and investment advice from a fee-based client-first fiduciary advisor may choose to engage with Triplett Wealth Management*, a division of the Triplett-Westendorf Financial Group. These folks would pay an annual fee deducted quarterly from their accounts, and in return receive conflict-free investment advice about their securities investments like equities (stocks for example), and fixed income (bonds for example), and any other securities-related investments.

Folks who are a good fit for this engagement are those who might feel good knowing that their advisor receives no commission or financial incentive to recommend one investment over another and that our firm does well financially when they do well.

Folks seeking this type of relationship pay a fee based on the assets managed within their plan. The fee covers the fiduciary management of market-based investments within their portfolio, as well as the ongoing maintenance of their personalized PT5 Written Retirement Income Plan designed to guide them to and through their very own vision of a successful retirement.

PT 5 Retirement Income Plan Screening – $2,400 – One Time Initial Planning Fee

  • Initial Comprehensive Plan Design – Steeped in our 6 cores values
  • Listen to, and take a record of, the vision you have for your future Establish written goals & organize your retirement resources
  • Evaluate social security & pension claiming options
  • Produce a comprehensive analysis of your current path projected forward
  • Included: Customized Social Security Analysis, Comprehensive Investment Analysis, Personalized Retirement Income Plan Examination.

PT 5 Retirement Income Plan Screening – $2,400 – One Time Initial Planning Fee

Includes Investment Supervisory Services & Ongoing Financial Planning & Advice – We Become Your Financial First Responder

  • $100,000 – $499,999 = 1.5%
  • $500,000 – $999,999 = 1.25%
  • $1,000,000+ = 1.0%

*Royal Fund Management doing business as Triplett Wealth Management

We believe every financial product is a tool. Each tool was designed to perform a specific job. Some tools are better quality or perform their intended job better than others. Freedom to choose the appropriate tool based on quality and effectiveness at getting the job done is important to our team. Sometimes insurance products like life insurance, fixed annuities, or long-term care insurance may be the right tool for the job. However, they are not all created equal, and specific manufacturers of these contracts are better at certain things than others.

When we have determined that it is in our clients’ interest to use an insurance contract issued by an insurance company to transfer specific risks away from them and their family, to an insurance company specifically specializing in handling such risk, those companies who we do business with pay our representatives a commission. Our insurance licensed representatives are completely independent, and therefore capable of representing a broad spectrum of companies. That means that they are free to choose the tool that they believe will provide the most economic value to our clients, from a quality manufacture, based on a specific job that needs to be accomplished.