Coronavirus And The Markets Update Presented by Bob Barber & Mary Jo Lyons
Disclosures This presentation is intended to provide a general overview of some aspects of the current economic environment. It is designed to provide general information and is not intended to provide specific legal, investment, accounting, tax, or other professional advice. The information is obtained from sources believed to be reliable, but its accuracy and completeness is not guaranteed. For specific advice on these aspects of your overall financial plan, you should consult your professional advisor. Any asset and/or returns shown in this report are not intended to predict nor guarantee the actual results of an investment product. This presentation expresses the views of CIS Wealth’s personnel, and there is no guarantee that such views are accurate. The material provided herein is for informational purposes only and is confidential. There is no guarantee that any investment will achieve its objectives, generate positive retur ns, or avoid losses. Investment advisory services offered through Christian Investment Advisors Inc. dba CIS Wealth Management Group, a registered investment advisor.
2 Timothy 1:7 (NLT) For God has not given us a spirit of fear and timidity, but of power, love, and self-discipline.
What Should A Christian’s Response Be To All This? A Biblical Worldview 1. God is ultimately in Control of Everything and it ALL belongs to Him - Psalm 24:1 2. Self worth is associated with a relationship with Christ, not with net worth - John 3:16 3. Peace, Patience, Self Control, and Wisdom over Panic and Chaos - Galatians 5:22-23 4. Contentment is in Christ, not the news, the stock markets, or external circumstances - Philippians 4:12 5. Pray for each other, our nation, the world, and healing - Philippians 4:6 6. Provide Hope - now, more than ever is the time to let God’s Light shine in a desperate world that needs real hope only found in Christ. People are scared and we have the answer - Matthew 5:14-16 7. Know the financial condition of your household - monthly expenses and cash reserves - Proverbs 27:23
The United States population is approximately 330 million If 1% of the nation or 3,300,000 of us gets the Coronavirus, 1 out of every 100 people would have the The Coronavirus infection. and Numbers Image from https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/summary.html
Help is coming quickly as every major pharmaceutical company on the planet seeks a solution and will be highly rewarded when they do.
The Markets
Bear Markets Bear markets cause panic as the sell off period causes people to believe it’s different this time and the markets will never come back. So, those who panic sell to those who know it’s NOT different, and it will come back. After bear markets, the markets have always gone on to new highs. What makes this time any different?
Bull and Bear Market Facts
Bull and Bear Market Facts (cont’d)
There are difgerent kinds of bear markets... Source: Goldman Sachs
S&P 500 Moving Averages 60 & 90 Days
S&P 500 Moving Averages 60 & 120 Days
Past Bear Markets and Chaotic Times Where Markets Rebounded 2008 - Subprime mortgage, housing bubble, Lehman Brothers Scandal 2000 - Dot.com bubble, Enron 1987 - Black Monday. Caused by programming and investor panic 1989 - Savings and Loan Bailout 1970 to 1974 - Vietnam, oil embargo and quadrupling of oil prices by OPEC, Nixon impeachment and high unemployment. 1958 - Major Recession 1929 - Stock market crash and the great depression following 1918 - Spanish Flu that took an estimated 20- 50 million lives Every single time in history the rebound has gone on to newer highs (But for disclosure purposes, I must say: Past performance is no indication of future results)
Time In The Markets Vs. Timing The Markets
A Time For Ecclesiastes 3:1-8 (NLT) Everything For everything there is a season, a time for every activity under heaven. A time to be born and a time to die. A time to plant and a time to harvest. A time to kill and a time to heal. A time to tear down and a Be very careful of time to build up. A time to cry and a time to laugh. changing a long term A time to grieve and a time to dance. A time to scatter stones and a time to gather stones. A time 5-10 year strategy to embrace and a time to turn away. A time to because of short term search and a time to quit searching. A time to consequences that keep and a time to throw away. A time to tear and a time to mend. A time to be quiet and a time to may last only 3-18 speak. A time to love and a time to hate. A time months for war and a time for peace.
The Strategy For Ultra Conservative - 100% Fixed income & Cash, No Stocks Times Like This Conservative - 80% Fixed income & Cash, 20% Stocks. Monthly Income is taken from Fixed Income side We make sure that those who need income from their portfolios Moderate - 40% Fixed income & Cash, 60% like our retirees always have Stocks. Monthly income is taken from enough outside of the markets to Fixed income side last years if the markets turned Growth and Aggressive Growth - Not used down like they did this past month. for income. 8-10 year time horizon or longer
JANUARY 4, 1999 - DECEMBER 31, 2018 Annualized Performance Fully invested through good and bad times (S&P 500 index) + 5.62% average return Invested through the good and bad but missed the 10 best days + 2.01% average return Invested through the good and bad but missed the 20 best days - 0.33% average return Invested through the good and bad but missed the 30 best days - 2.35% average return Invested through the good and bad but missed the 40 best days - 4.2% average return Invested through the good and bad but missed the 50 best days - 5.87% average return Invested through the good and bad but missed the 60 best days - 7.41% average return SOURCE: JP MORGAN and Motley Fool It’s Time, Not Timing
Risk and Portfolio Strategies
What’s Your Risk Number? Let's Find Out. Greater risk potentially equals greater rewards which equals greater volatility. Less risk equals less rewards which equals less volatility. https://www.ciswealth.com/what-we-offer/riskalyze/
Bucket Strategy & Diversification Ecclesiastes 11:2 (NLT) But divide your investments among many places, for you do not know what risks might lie ahead.
If You Can, Buy More While Markets Are On Sale Example: Share Price before decline $100 a share: $1,000 buys 10 shares Share Price declines to $70 a share: $1000 buys 14.28 shares Share Price bottoms at $50 a share: $1,000 buys 20 shares Total Investment: $3,000 and 34.28 shares owned If price goes back to where it was when things were normal within 2 years, 34.28 shares would be worth $3,428 which computes to a average return of approximately 5% annually, not including any dividends you may receive.
The Financial Planning Process Review and Track Current Spending ● Do we need to adjust the levers? ● ○ Work Longer ○ Save More Spend Less ○ Re-prioritize Goals ● ○ Both short and long term ● Implementation Monitoring progress, making ● adjustments
Financial Planning in the Midst of Chaos Am I still ok to retire? ● ● Do I now need to adjust my The numbers have spending? Should I consider doing a Roth ● changed, have your Conversion? questions changed? ● If I reduce my equity exposure going forward will this impact the ability to meet my goals?
Matthew 6:25-29 (NLT) That is why I tell you not to worry about everyday life—whether you have enough food and drink, or enough clothes to wear. Isn’t life more than food, and your body more than clothing? Look at the birds. They don’t plant or harvest or store food in barns, for your heavenly Father feeds them. And aren’t you far more valuable to him than they are? Can all your worries add a single moment to your life? “And why worry about your clothing? Look at the lilies (bluebonnets in Texas) of the field and how they grow. They don’t work or make their clothing, yet Solomon in all his glory was not dressed as beautifully as they are.
Christian Fellowship ● Attend online church services ● Connect with family members and old friends via Skype or Facetime ● Call an old friend who may be shut in ● Check in on your neighbors ● Read Scripture - Get into his word ● Give Generously
Give Generously - Open Your Hearts and Hands Support your local food bank ● ● Buy discounted gift cards to local There is no better restaurants ● Support a local small business time to consider Encourage younger generations to make ● giving to those in an appointment at their local blood bank and give blood need and to those ● Engage with seniors in your neighborhoods and local communities that have lost jobs ● Babysit for a young mom who has to get during this crisis. out so she doesn’t have to take her young children with her or a young family whose parents need to work
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