Navigating a Market Like No Other

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Apr 02, 2020

By Tory Meiborg, Partner at World Trend Financial

We are here for you. We will continue to plan for your well-being, manage your portfolios, and provide you with guidance through these unprecedented times. We understand the uncertainty suddenly imposed on all communities by this coronavirus and we will continue to provide you with the highest level of service during these times.

We are accessible. Although in-person meetings are temporarily on hold, the same phone numbers and email addresses you always use to reach us will continue to work as usual and you can use those channels to contact us. “Social Distancing” is the buzzword right now, but I prefer to think of our approach as ‘physical distancing’ because I believe we need the social interaction to cope with today’s uncertainties. We have enhanced our computer screen sharing and videoconferencing capabilities so we can still meet ‘face-to-face’ if you like.

We are here to talk with you, explain what we know, and sometimes just to provide some perspective. Everyone at our firm is committed to seeing you through these challenging times

Navigating a market like no other

The current market environment is unique in basically every way possible. We are simultaneously battling a health crisis and a financial crisis. This has caused the fastest major market decline, from peak-to-trough, in the history of the U.S. stock market. As a firm, we have been here before, through 1991, 1994 corrections, the dot com bust of 2000-02 and the financial recession of 08-09. Our approach has always been one of requiring a fair amount of discipline and we continue to rely on this today.

If you have been managing own your finances, but do not know what to do with the current volatility; now is the perfect time to seek professional management. With recent volatility in both equity and fixed income markets, these challenging times can present financial planning opportunities. Now is the time to consider refinancing mortgages, improving tax diversification through Roth Conversions, Tax-Loss Harvesting, and purchasing stock of good companies at oversold levels. If you know someone who could use our assistance to answer questions or concerns, please let me know and I would be happy to follow up.

This may be an opportunity

For some of you, this is an opportunity to buy as prices fall. If you have cash on the sidelines, this may be the ideal time to put it to work. If you are an investor, you have probably heard or read many quotes from Warren Buffett countless times. I feel a few of his famous sayings bear repeating now.

  • “A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves. But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the ‘hamburgers’ they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.”
  • “Whether we’re talking about stocks or socks, I like buying quality merchandise when it is marked down.”
  • “For 240 years it’s been a terrible mistake to bet against America, and now is no time to start.”

As we reflect on the last 100 years, there have indeed been scary periods. During those times, as well as now, it is worth recalling that this too shall pass. It is likely we will be dealing with a turbulent/fearful market for the foreseeable future. As you do so, I hope you will remember that cheaper stock prices are buying opportunities for those who will be net future purchasers. It does not make sense to worry about those things over which you have no control. Ultimately, investing comes down to belief. Do you believe that the companies of the world are going to be worth more in the future than they are today? If you do, there is a case for investing, or staying invested, in them.

We will get through this together

These are challenging times. Updates are coming out almost daily. We will keep you informed. Please reach out to the investment advisor representatives at World Trend Financial for assistance as you work through the next days and weeks. They can be reached in Cedar Rapids at 319-364-3041, or in Iowa City at 319-339-4884.

Even though we cannot meet with you in person, we are here for you! Please stay safe and healthy.

Category: Featured