Insights & Advice

Dalton — Despite a pandemic that has so far cost the U.S. 26 million jobs, the S&P 500 is down only about 15% from its all-time high, after jumping 29% from its March 23 low. It doesn’t make sense. Well, if the economy does turn around quickly, then I supposed I could rationalize it a little. But come on! The stock market has slowed to a point where oil was trading to an incredibly low $10 per barrel last week, and then at a negative $36.11 just hours later (based on the May futures contract for West Intermediate crude). When the…

A crisis is a problem that comes as a surprise, exceeds the resources that are typically used, changes the status quo and threatens a person or organization. As John F. Kennedy said, the Chinese word for “crisis” is composed of the two characters signifying “danger” and “opportunity.” Although catastrophic for some businesses, facing a crisis head-on can result in your business emerging stronger. Business owners can serve their community by surviving, prospering and retaining employees. In just a few weeks, our attention has shifted from innovation, growing revenue and gaining market share to survival — we’ve transitioned priorities to cutting…

Dalton — Tuesday afternoon, April 14, coincidentally after I submitted last week’s column, I invested in more equity – the NASDAQ 100 (ETF symbol: QQQ) and the NASDAQ US Dividend Achievers Select Index (ETF symbol: VIG). As you may recall, I am just about fully invested, mostly in buffer funds (used to protect portfolios from a falling stock market while still allowing me to capture some equity upside), some traditional equity, and some higher-yielding money market accounts for my more conservative clients. Exchange-traded buffer funds have been my primary tool to manage risk during this crisis. I was compelled to sell two…

Dalton — The stock market should pull back. It always does, by some magnitude. However, on the morning of Thursday, April 9, the Federal Reserve prescribed some good medicine, and the wounded stock market should heal even faster than we thought prior to this “whatever it takes” approach to propping up the economy. In response to the Fed’s actions, I bought both equity and bonds on April 9. In an unexpected move, the Fed said it was creating and expanding nine lending programs for states, cities and midsize businesses to the tune of $2.3 trillion dollars. Further, it signaled that it…

Dalton — The 880-page CARES (Coronavius Aid, Relief, and Economic Security) Act was passed recently. If you don’t know why or that’s important to you, it’s not for a lack of understanding or interest on your part. It’s because there’s been almost too much information thrown at you in a sea of other information. Please allow me to skip fancy language and multisyllabic words that make me seem smart and just give you the bullet points you might have missed. It’s not meant to be a full list, and it’s not meant to be a set of instructions (or advice). My…

Dalton — In last week’s column, “Corona Crash,” I wrote that we could get a “rip-your-face-off rally.” A 20% gain in three days — Tuesday through Thursday — certainly qualifies. Even sandwiched between big down days, the Dow ended the week up 12.8%, its best week since 1938. Of course, that came off the heels of the worst week since 1932. The ups and downs (especially the downs) have been crazy. For the month of March, through the 27th, the average daily change for the S&P 500 has been 5.2%, exceeding the previous record of 3.8%, set in 1929. Is this…

The new coronavirus crisis has reached a new phase, where public health systems are acting to contain the spread of the virus outside China. Clearly, the main emphasis should be on containing the virus, but the economic impact is significant and has the potential to affect your business. According to a survey from Veem, 27 percent of small-business owners believe the coronavirus will have a moderate to high impact on their revenue. An additional 30 percent expect the virus to have a moderate to high impact on their supply chain. More than half, 52 percent, say they are taking measures…

Dalton — Last week I was not able to write a Capital Ideas column because I was getting in what will likely be my last bit of work travel for a while. A lot has happened since I’ve been gone from The Edge. For instance, last week was the worst week for the stock market since 2008. Some years, nothing happens. Some days, years happen. We’ve been experiencing daily moves in the stock market that typically take years to transpire. The average year sees about a 7 percent return for stocks. We’ve been seeing 7 percent swings in a single day….

Dalton — In mere weeks, giant gains and losses in the stock market erased about six months of gains. From its Feb. 19 high, the S&P 500 has corrected more than 10%, the seventh time it has corrected that much since the bull market started in 2009. That includes an 11-day correction, which ended in August 2011 and wiped out eight months of gains. In August 2015, it took six days to evaporate 11 months of gains. And it took only nine days in February 2018 to say goodbye to the prior three months of gains. Those corrections of 2011 and…

“Boy, that escalated quickly. I mean, that really got out of hand fast.” — Ron Burgundy Dalton — What in the actual $&#@ happened last week?! The Dow Jones Industrial Average and the S&P 500 dropped 12 percent and 11 percent respectively. Both indices suffered their fastest-ever corrections (a correction being defined as a decline of 10 percent). Last week was the worst for these indices since the financial crisis of 2008. The media’s reason behind the sell-off was concerns about COVID-19, referred to as the coronavirus, and its impact on the global economy and corporate profits. Some companies, citing the…

Dalton — The physical impact of the coronavirus (a.k.a. COVID-19) is immense. And I don’t mean just the symptoms or the death toll of the virus. Businesses in China are struggling, with many workers unable to reach their factories and offices, disrupting global supply chains. The boost we were hoping to get from the signing of Phase I of the U.S.-China trade pact has all but evaporated. Listen, I am no infectious disease doctor. I won’t even try to suggest that I know anything about the likelihood of the coronavirus going global and becoming a pandemic. Currently I am investing…

Traditionally, many financial planners have used the income replacement ratio to determine how much money you will need to fund your retirement. The age-banding approach is an innovative strategy chosen due to its increased accuracy and lower initial money required to create an income stream throughout a 30+ year retirement. A hypothetical retirement will be divided into three separate periods. A different investment mix with different amounts of risk taken is then used for each period. Separating expenses into various bands allows your financial planner to develop a plan with both improved accuracy, and outcomes. Age banding is a relatively…