We want to thank our clients for their patience and trust in us. It’s days like those we have had over the past two weeks which make our work on your behalf both challenging, and hopefully ultimately rewarding for you.
We know that all of this has stemmed from the unknown of how long and how significant the coronavirus outbreak goes on. We do think given that the rates of illnesses appear to have slowed a bit where things were worse – ie China, Italy, that it’s a good sign. Of course, as we mentioned in our last update, we expected that the Fed would proactively cut rates…and lo and behold two days after our update they did just that.
Given where the 10-year treasury is now trading – which is only at about .50%–we expect that the Fed may in fact cut rates again this month. That’s what the bond markets are telling us, in fact. Another interesting trend we noticed today was that Gold really didn’t move higher- which tells us that cash sold out of the stock market is being kept liquid in order to re-deploy into the equity markets as opposed to a belief that long term fears are taking hold.
So yes, we did a little buying today. We will continue to look to be opportunistic. There are major differences in what’s happening in the markets today vs what happened back in 2008. Is there a higher chance of a MILD recession in a couple of quarters that didn’t exist a month ago? Yes. But remember, this is a supply side driven economic slowdown, and that slowdown will dissipate quickly as manufacturers put their people back to work. In fact, we believe we could actually be looking at a situation 12 months to 18 months from now that we actually have such a mismatch in supply and pent up demand (purchases of goods and services put off due to coronavirus) that we could start to see some solid signs of inflation. And, given rates will be going to zero here shortly, signs of inflation will actually a very good thing if at that point the Fed can be in front of things and pivot to start to raise rates at correct time. For those who have the time horizon of at least 5 years, and the understanding of long term growth of the stock market, we would encourage you to consider putting new cash into your investment accounts now – while there is this window of opportunity to add to, add new, high quality, beaten up names.
Some clients have asked us if we have a way for them to get a higher rate on cash they have sitting in their savings accounts. While most advisors would say, sure! We can invest it for you, we’re not the average firm. Instead, we sought out to find an appropriate savings account just for our clients, and so we are pleased to be able to offer you a savings accounts for balances over $25,000 coming out of an existing savings account at a rate of 1.65%!. Yes, that’s 1.65%! We are able to provide this just for our clients because of our affiliate relationship with Malvern Bank, NA., a $1.4 billion asset bank headquartered in Malvern, PA.
Please contact us if you would like to open up that savings account and take advantage of this rate. It can be done online or via phone or person.
Also, if you’ve got a mortgage loan above 4%, it’s probably a great time to consider refinancing! We can help you with that too, just get in touch with us!
As always, any questions please just call us or email us. We are here for you to answer your questions or concerns 24 hours a day, 7 days a week!
Now is the time to take advantage of opportunities in all areas of your financial world. However we can be helpful, please don’t hesitate to ask and help you figure out anything on your mind related to your positioning for the future.