Broker Check

Important Personal Letter To Our Clients About These Times We're Living In

March 16, 2020

Dear Clients & Friends,

To begin with, I hope this letter finds you and your family safe. It is certainly a chaotic time, but as is often stated, “this too shall pass.”

First off, it’s okay to be nervous about the market and the economy. Those are your instincts and emotions kicking in, but those instincts can be your worst enemy when it comes to investing. Now is not the time to panic. Many will do just that, but we stand committed to not letting that be you.

My advice is to limit your viewing of news media as they will feed those instincts. Emotion brings ratings. They do not care about your emotional and financial well-being. Stay informed, but try your best to live a normal life.

We will contact you if there is something you need to do.

Market turbulence is an occasional event we encounter and is a not unexpected part of the investing process. That doesn't make it  any more pleasant to go through. The analogy I like to use is that of flying in a commercial aircraft. Most, unless they fly frequently expect to always have a smooth flight and mostly this is the reality. However, when turbulence is encountered, less experienced flyers either immediately down their alcoholic beverage of choice and grip the armrests with white knuckles even though they know that the plane is designed and built to survive far worse than what they are going through. Instincts and emotions trump knowledge at times such as these. Meanwhile, up in the front the pilots are functioning normally, perhaps even joking about previous turbulent encounters they'd experienced, drinking their coffee and just flying the plane. Watch the cabin attendants. So long as they're not receiving panicked messages from the flight deck and their pupils haven't dilated, there's nothing to worry about. Same with investment markets. So long as I'm staying disciplined and even putting my money into the market and my pupils aren't dilated, this is just periodic, expected market turbulence. Just as with the flight, this too will have a positive ending.

Market Conditions:

As you are probably aware, investment markets are driven by fear and emotion and that is exactly what is going on now. There are companies out there that thrive on these in opportune times and unfortunately investors are the ones that typically pay the price. We believe that this is a time to stay calm, stay disciplined, re-balance and you will be rewarded. It is never the right time to panic.

One of the benefits of your portfolio structure is its design for these market conditions. At the end of quarter, we will look to re-balance you, allowing us to take advantage of lowering stocking prices.

I’ve been through these down markets before and if you’ve been a client for a while then I know you’ve seen this before too. The good news about this downturn, as opposed to the 2008 decline, is we know it is caused by the Covid-19 threat and not deeper underlying issues as it was in 2008. Companies, financial institutions and the economy are in far better shape today than they were back in 2008 and far better able to weather this medical/financial storm.

It’s times like these that it’s important not to panic. We have planned for these times and we will get through them together. Remember that no one can predict the future, but we can leave you with some facts about other, more recent devastating epidemics and how some of the funds in your portfolio did.

· 2002 SARS - 5 years after the outbreak the Dimensional International Small Cap fund was up 258% and the International Large Cap was up 163%.

· 2009 Bird Flu – 5 years later the French/Fama US Growth Fund was up 110% and the S&P 500 was up 105%.

· 2014 Ebola – 5 years after the French/Fama US Growth Fund was up 98% and the S&P 500 was up 73%.

Note: past performance is no guarantee of future results -- but it can provide a useful point of reference.

If you’re worried please call us, We are here to help. Otherwise just live your life, support your friends and family and do what you can to limit unnecessary exposure.

As for your accounts:

(1) Try to postpone taking big lump sums of money out during this time if you can. Taking large sums of money requires us to liquidate shares and forces us to sell at a low point locking in loses.

(2) For those of you taking monthly draws, if you have excess cash each month it’s a good idea to temporarily cut back. But ONLY do this if you have excess!

Money & Clarity Continuity Plan

We have a business continuity plan for our office and can easily and quickly transition to a secure remote site if necessary. All of us can work from home and still answer your questions and service your accounts. We also can do phone call appointments with you. If we are forced to close the office (doubtful at this point), please know we will still be working and available remotely. My cell phone number is listed below. Judie's is: 678-923-2251.

I would ask that if you are sick or feeling sick that you please reschedule your appointment and not come to the office.

We have been through this before and will go through it again in the future, but your actions in these downturns dictate what returns you will get long term. It only takes one bad decision to destroy years of investing.

Try to limit your news consumption and go do something you enjoy and makes you happy.

Last, if you have family members or friends who are being affected and concerned by the rapid and "violent" market decline or current economic conditions please feel free to provide them with either my email and/or phone number and tell them to mention your name when contacting me. I am more than willing to help them deal with all of the angst a market and financial situation such as this occasions. There will be no cost involved and this is a service I'm more than willing to provide to those who are important to you!


Fred T