We hope this month’s issue finds you, your family, and loved ones safe and healthy. We have much to be grateful for as we navigate COVID-19, the investment markets, self-isolation, face masks, and new technology together. Enjoy!

An Update on The Investment Markets

The unemployment rate is the highest since the Great Depression. Manufacturing dropped the most since 2008. The Leading Economic Index plunged the most on record. Earnings estimates have been revised down at a record rate. All of the above has been reported during the S&P 500’s 31.4% upward move off the March 23 low. The benchmark is 15.2% below its February 19 record high and down 11.6% on the year. In fact, the S&P 500 posted its best week since 1938, while at the same time the 3-week total of jobless claims hit 16 million.
 
All of the world’s largest economies have collapsed due to the COVID-19 pandemic. Authorities have responded with unprecedented monetary and fiscal stimulus. Although countries are at different phases of the crisis, a clean V-shaped recovery seems unlikely in any of them. For the U.S., we expect a U-shaped or a square root shaped recovery.
 
Flattening COVID-19 curves tell us little about what will happen to future economic growth and earnings — as the scale of the damage will only be known in hindsight. But, global stocks have been able to rally as expectations have shifted away from the gloomiest outcomes. A critical question that is difficult to answer is whether the “flattening of the curve” implies the coronavirus is being contained OR could we see its resurgence later in the year during the flu season?

As the markets have recovered, we are seeing narrow leadership and limited breadth improvement, reflecting unhealthy market conditions, consistent with past global bear markets and recessions. The All Country World Index’s (ACWI) top 40 stocks account for 32% of the ACWI’s market cap, with the top 10 carrying 16% of the weight.  Commodity weakness and gold strength are consistent with a continuing global bear market and global recession. This concentration is not healthy. Sentiment by itself can drive rallying in the stable big-name growth stocks, but a lasting stock market advance requires participation from a broad contingent of markets, sectors, and individual stocks.  The higher the percentage of stocks participating in this rally, the greater our confidence this rally is sustainable. It would also be a sign investors have started to consider valuations as justified and see increased upside potential in a broadening contingent of markets and sectors. In addition, broader participation in the current rally would reflect rising optimism in the outlook for economic growth and corporate profits, currently in very short supply.
 
Our message continues to be one of caution about the prospects for the rally to continue. We remain underweight stocks, overweight bonds, and cash.

This Is Life – We Continue to Adapt!

As we continue to communicate and share our experiences during this unprecedented economic shutdown and self-isolation, it is truly remarkable to see how friends, family, and clients have found ways to remain connected and enjoy some of the silver linings of COVID-19. I was speaking with one of my friends while sitting in a line of 25 cars at a Starbucks drive-thru. Yes….. 25 cars….., but it’s Starbucks! Completely normal behavior in these times.  As always, we keep names confidential, but I thought you might enjoy her COVID-19 experience.
 
She is part of a group of sixteen women who regularly get together to socialize over lunch or a movie. Both those options have clearly not been possible due to current circumstances. Their solution was a ZOOM movie night! The organizer picks a movie and sends an invite to everyone in the group. On movie night, everyone joins the meeting from their homes, and the organizer shares the movie by sharing her screen with all guests. Everyone is on mute and enjoys the movie. If anyone has a comment on a scene, the “raised hand” option gets popped up, the movie is paused, and a discussion ensues. They have done this three times and continue to socialize while following all the respective self-isolation protocol. Staying in touch, finding ways to adjust, and being grateful for what we can do since our old habits are no longer an option is a trait we can all choose to follow. New habits lead to new experiences and possibly better friendships.

It’s the same for us at Guardian Financial Partners, LLC. We have adjusted to this environment easily and continue to communicate using technology and the benefits of being nimble, adaptable, and available. Life goes on. We just find more ways to do our reviews, and handle questions. Attached to this email is our financial checklist (click here.)  Take a moment to review and check off any items you wish to discuss. Once received, we will give you a call or schedule a time to review your needs. Possibly a ZOOM meeting! Thank you for your trust and support!

Does Financial Planning End Because We Are in Shut Down?

The correct response is a resounding NO! These times are an excellent opportunity for reviewing goals both short term and long term and assessing if anything needs to change. As many of you know, we regularly stress test your financial plan to determine its probability of success. We provide a stress test score to you during both your portfolio/investment review meetings and when we review the details of your plan. It is a simple way of answering a very relevant question – Are you okay as your investments navigate this environment?

The most efficient way to access your score is by utilizing the GFP Client Portal. Click here to sign into the portal. One of our founding partners, Hung Nguyen, can help you access your secure information should you not be registered or simply have forgotten your login credentials.  Click here to view his calendar to schedule a meeting to review your score or get help logging into the GFP Client Portal. Once you have completed this process you can download the mobile GFP Client App to your phone and have access to your information “On The Go” by visiting the Apple or Android app stores and searching “GFP Portal”.  For those of you who are not clients, feel free to schedule a time to discuss our service models and how we use technology to improve your overall client education and experience - Click here.

As always, we are appreciative of your relationship with our firm on both a personal and professional level. These times will pass, we will be better as people, more informed, comfortable with new technology, and simply grateful for a few things we might have taken for granted…… like no lines at Starbucks!

If you would like to schedule a time to discuss your needs, please click below and pick a time on our calendar. Click here for our calendar.