September 2021 Newsletter
Given all the “challenging” broadcasts bombarding us – from Afghanistan to the Delta variant, one could easily find themselves overwhelmed.
However, we are going to start this letter with some awesome news! We are delighted to announce the addition of a new member to the Reality Financial Planning Services’ family – Olivia Cunningham (John’s second daughter) was born August 2. Momma and baby are doing well; John is getting more grey hair (finally). Congratulations and best wishes for good health and happiness always.
ZOOM Webinars for Clients
The COVID era has obviously created challenges for all of us. One never knows when all our plans may derail by contracting the insidious illness. However, since planning is what we do and encourage, one of the most important things for which everyone should plan is the “what if” something happens to our health or worse.
While many of you have – as we have harangued and harassed – done some estate planning, this month we are going to provide an overview and/or review of the important components of an estate plan - documents to prepare, planning to be done and how best to communicate this difficult topic with family and friends.
We are also honored to have one of our most insightful and compassionate clients, Linda Lee, assist with this presentation. Linda has done some excellent work in helping her friends and circle of influence develop and implement “Legacy Love Letters”. We believe you will find this topic most inspirational.
So, mark your calendars for Wednesday, September 22, at 5:00, to join our ZOOM webinar on “Estate Planning in the COVID Era”.
If you are interested in attending, please email us at Inquire@RealityFinancialPlanning.com and John will send you the ZOOM meeting details.
As an FYI, all our past presentations can be found in the Media & Posts tab on our website www.realityfinancialplanning.com.
If there are any other topics for which a Zoom presentation would be relevant to you, please let us know.
Mental Health and Finances
One of the biggest concerns that we as planners have for our clients will always be health issues. Whether those are physical maladies (cancer, heart disease, COVID-19) or mental conditions (Alzheimer’s disease, dementia, etc.), all of them can have deleterious impacts on our finances and the decisions we make.
Having long been stigmatized as a sign of weakness, mental health problems have become much less taboo in recent years. The reaction to sports stars like Michael Phelps, Kevin Love, Naomi Osaka and Simone Biles have brought the issue to the forefront for many fans.
The pandemic, with its unique set of challenges, accelerated that trend, as it not only caused a spike in symptoms of anxiety or depression, but also led to more people “opening up” about their problems. In a recent Statista survey, 3 in 10 American adults report that the COVID-19 situation has affected their mental health negatively, making an open discourse about mental health issues that much more important – as you can tell by the chart below.
While we are certainly not psychologists, we are here for you if you are concerned about the influence these stresses may be placing hardship on your financial planning goals. We tease about “hand holding” being in our job description. But we are serious about wanting to help.
Recently, we both finished reading an excellent book titled “Maybe You Should Talk to Someone”, by therapist Lori Gottlieb. We highly recommend it.
Call it the pendulum market. Market pundits call it “rotation.” Over the past year, the market has swung from being value-oriented (think blue chip companies like Clorox, banks, etc.) to growth companies (i.e., Google, Apple, etc.). The gyrations have been regular, often, and, ironically, not terribly predictive. Normal market volatility has really been relatively absent.
Resultant from this behavior is that the market has not had a 5% “correction” in the past year even though a 10% correction annually is typical. In fact, the S&P 500 has had 53 all-time, record closes and is on pace for a 20+% gain this year. How can this be and why is it happening?
Many will point to the reactions government officials took in response to the pandemic: the accommodative stance of the Federal Reserve pumping billions of dollars of liquidity into the system and the passage of President Biden’s “rescue” plans. Certainly, those were catalysts to combat potential economic collapse that the pandemic sought to bring upon us.
Many of us econ geeks now chuckle over all the much ballyhooed hand-wringing over the possibility of inflation rearing its ugly head. That has not happened either. Which is not to say that it won’t.
Last week, Federal Reserve chairman Jerome Powell prepared the markets for the central bank to pull back on some of its monetary stimulus, saying it’s likely to start tapering its $120 billion in monthly bond purchases this year. Powell said inflation is solidly around the central bank’s 2% target rate, one of the goals of the Fed’s dual mandate. It has “much ground to cover” to reach its other goal of maximum employment, however, though there has “been clear progress” toward it, Powell added. The Fed has used the term “substantial further progress” as a benchmark for when it will start tightening policy.
The financial markets’ reaction is a sign that the central bank has successfully prepped investors so far for a removal of its $120 billion a month in bond buying and may avoid a “taper tantrum” like the one that rocked markets temporarily at the end of 2013. Markets seem relieved the Fed is not planning to raise rates soon.
And so, the pendulum swings, life goes on, and we enjoy the ride.
With football season just around the corner (yay) and maybe cooler weather, hopefully you can make plans to enjoy our Florida paradise. Whatever your plans may be, please take care of yourselves. Be well and find your happy place.
As always, thank you for the trust and confidence you place in us. It is something we never take for granted and sincerely appreciate. Please do not hesitate to reach out whenever you have questions, concerns or whenever we may be of service to you.
Joe Downs, CFP® & John Cunningham, CFP®
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3947 Clark Road, Sarasota, Florida 34233
Office: (941) 366-5700