Our New “Normal”…

Practically all of us have been impacted in one way or another over the last month.  We ARE certainly in this together.  Hang in there, as we WILL get through this!

What is now being highly debated?:

  • When will new cases and deaths from this virus peak then drop?
  • Will there be a re-occurrence of new cases after the drop?
  • When will we be able to resume life as normal?
  • What will be the process of resuming life as normal?
  • How will business survive the “lack of business”?
  • How will this impact the stock, bond, real estate and other markets?

Life Back to Normal, When?

We’ve heard on the optimistic side, mid-April and on the pessimistic side, late fall.  This is incredibly important, economically speaking.  As the Government, thankfully appears willing and able to assist, there is only so much that can be done for small businesses who actually employ a significant number of workers.

If we’re closer to the optimistic side, I’m thinking most businesses survive and will begin to hire and rebuild as we progress back to our new normalcy.

If we’re closer to late fall, I’m thinking several businesses will not survive and be forced into bankruptcy.  This will certainly slow any type of economic recovery.

As of now, I’m leaning and hoping by mid to late May we are able to start resuming many activities.  By this time, individuals and families should have received their first stimulus checks and many people will be receiving very high unemployment benefits.

Market is thinking positive, for now!

Certainly the “market” itself does not think, however investor sentiment influences trading which of course impacts stock and bond pricing.

As of this writing, late Monday morning, the market is trading up over 4%.  The thinking is between the stimulus, monetary policy and the belief we’ll control this virus, the economy will recover and this will be viewed as an awful short-term historical event.

Last Friday we heard the monthly jobs report, where we shed over 700,000 jobs.  The really not so good news is the report cuts off in mid-March.  The last 2 weeks of March are not included and will roll into the employment report for May, which should be a very large number.

On a positive note, the market only went down a couple percents  last week…… I know that sounds a bit crazy, however with the awful economic news announced and the predictions by many suggesting the economic data to be reported going forward is going to be “eye-popping” awful, the market in my opinion for now, is looking 6 months out, with an optimistic view.

I do not believe the markets will move straight up.  I think a lot of back and forth will occur until we understand the process of getting back to normal, which will determine which industries will move forward 1st, 2nd and so forth…, with some industries perhaps altered forever.  These large moves will provide investors the opportunity to position portfolios as appropriate.

 

Personal Impact

My personal and business situation is only a microcosm of the global impact.

My mom has been battling cancer for 7 months and is doing as best as can be expected.  Typically my 3 cousins, her neighbors, and I would stop by her home very frequently.  She had a visitor just about daily.  Now with the virus situation, only a couple of us are able to visit.  When mom goes for treatment or to visit one of her medical appointments, no one is allowed in with her.

My assistant’s day care center closed, as ordered.  This means Ellen either has to work from home or bring her daughter into the office.  Certainly not awful, however requires significant adjustment.

My son-in-law’s business is practically at a stand-still, not to any fault of his own.

Several business owner clients have absolutely no revenue coming in, with no sign of when this situation will truly be over.

I received a call from a client whose daughter-in-law was diagnosed with cancer last week.  Neither her husband nor relatives can be with her while she’s in the hospital.  That is so incredibly sad!!  Brought immediate tears to my eyes!!

Many people either have already, or will be negatively impacted far greater than I.  My empathy goes out to all impacted.

Where Do We Go?

If you know me well, you know I’m a very optimistic person, however very realistic.  It IS my belief we WILL get through this.  The journey however, is filled with unknown challenges.  I believe we live in the greatest country in the world, where our ingenuity and capitalistic nature will prevail in leading us back to a growing economy!

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Paul Levin CFP®, ChFC®, RICP®

Retirement Income Certified Professional®