Coronavirus Update from Bill Simonet

In volatile and stressful times like these, it’s always important to have perspective. Since the turn of the millennium, the market’s negative response to health crises has been relatively short-lived. As this table shows, approximately six months after early reports of a major outbreak, the S&P 500 bounced back by an average of 10.47%. After 12 months, it rebounded by an average of 17.17%.

Source: Dow Jones Market Data, as cited on foxbusiness.com, January 27, 2020. Stocks are represented by the Standard & Poor’s 500 price index. Returns reflect the change in price, but not the reinvestment of dividends. The S&P 500 is an unmanaged index that is generally considered to be representative of the
U.S. stock market. Returns shown do not reflect taxes, fees, brokerage commissions, or other expenses typically associated with investing. The performance of an unmanaged index is not indicative of the performance of any particular investment. Individuals cannot invest directly in any index. Actual results will vary.
*End of month during which early incidents of outbreak were reported.
**H1N1 occurred during the financial crisis, when, as during other periods, many different factors influenced stock market performance.
Although there are no guarantees the current situation will follow a similar pattern, it may be reassuring to know that over even longer periods of time, stocks typically regain their upward trajectory, helping long-term investors who hold steady to recoup their temporary losses, catch their breath, and go on to pursue their goals.

Why Financial Planning Matters
I became a Certified Financial Planner Professional™ for two reasons: first, I wanted to learn the things and develop the skills to be financially independent. That education wasn’t available to me in my youth. Not because my parents didn’t want me to be successful- they just didn’t know what opportunities. As I grew up and saw the opportunities that existed for people from different backgrounds and communities than I came from, I realized that there was an entire world outside of simply “working hard” and “trying to get by.” Working smarter almost always leads to financial and emotional success. 

The second reason is because of times like this- to share those things that I’ve learned with you and help you live your best life; free from the fears and constraints of financial insecurity. Financial freedom is more than just the size of your portfolio and the market movements that can affect your net worth. It is the comfort of knowing your child can attend the college of his or her choice. It is realization that you can retire on your terms. It is the safety of knowing you have someone to talk to when – not if- things get rough. Like today.

What We are Doing to Help
At Simonet Financial, we are focusing on the long-term effects of the recent market volatility and the impact on your financial plan and your financial future. Our planning process integrates all areas of your financial picture: cash flow, investment, retirement, taxes, education, insurance, special needs/ dependent care, small business, and more. Specifically, we are:

1.    Adjusting cash holdings within our managed portfolios while still maintaining portfolio allocations.

a.    For clients that are in retirement or close to it- your retirement portfolios will have a higher cash holding (5-10%) and any dividends will not be reinvested during the market downturn.

b.    If you are currently receiving distributions from your portfolio, those will continue. However, we will try to limit liquidations to reduce the realized losses to your portfolio by using cash on hand or dividend income to cover your distributions.

2.    For clients that are younger, have a longer investment time horizon, or have discretionary cash flow; I encourage you to take advantage of current market conditions and increase your investment contributions. Market downturns offer a great buying opportunity and allow for increased investments at a discount.

a.    This will not guarantee a gain. However, it does provide an opportunity to maximize returns over the life of your portfolio.

b.    Dollar-Cost Averaging is your friend. Planning for your long-term future means consistent action and flexibility when opportunities arise.

3.    Providing “What if” Scenarios to model the long-term impact of the current market conditions on your financial future.    

a.    Our financial planning software allows us to model “black swan events” and review the implications across a broad spectrum of issues: taxes, cash flow, retirement timing, etc.… Simply call our office and we will game plan different scenarios for you!

b.    All clients will receive a “Market Confidence” Check-in using our portfolio risk management software. This will allow us to better gauge your emotional state during this tumultuous time and adjust our messaging and solutions to meet your individual needs. Clients with an portfolio held at our firm should expect this within 2-4 business days.

Regarding Covid-19 (Coronavirus) and Client Meetings
The health and safety of you- our clients- and our family is our top priority. We also want to give you’re the freedom and flexibility to address your planning needs in the manner that is best for you. As of Friday, March 13, 2020, our location (Kyle, Texas) has NOT been affected by a “positive” or “presumptive positive” diagnosis of Covid-19 (Novel Coronavirus). However, we are taking precautions to protect our clients, our families, and our staff.

Beginning Monday, March 16th, 2020 through Friday, April 10th, 2020, all appointments and client meetings will be conducted via conference call or video conference utilizing Zoom Software. You can download the required software on your phone or laptop by going to the appropriate app store on your device or simply going to www.zoom.us.
If you would still prefer an in-person meeting, we will do our best to accommodate. However, we will require that all in-person meetings be held in our Kyle office and we will be implementing social distancing protocols as recommended by the Centers for Disease Control. If you have met me, you know I’m a hugger like no other! So, this will be difficult- but we will persevere!

How You Can Help
There is no such thing as stupid question. Your health and financial future is as important as breathing and water. We are here to answer any concerns you may have and to provide clear guidance on financial options you can pursue to protect yourself and your family. Financial Planning exists for precisely this reason- to provide you and your family or business with the peace-of-mind necessary to live your best life! Our firm couldn’t exist without you and we want to make sure you know how important you- our clients and family- are to us! We will maintain normal business hours and will be available for any of your needs. However, we ask that you do the following:
–    DON’T PANIC!
–    Review your financial plan and log in to your personal financial management portal at www.simonetfinancial.com and click on “CLIENT LOGIN” to review your current plan.
–    Call or email us with ANY concerns that you may have.
–    Follow CDC recommendations to keep yourself and your family healthy and safe.
–    Know that you have a fiduciary Advisor on your side to help you weather this storm!

It is my absolute pleasure and honor to serve you. I look forward to talking (and hugging) you soon!

Best Regards,


Bill Simonet, CFP®, AIF®
Managing Principal
Simonet Financial Group, LLC

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