Broker Check

Salt Lake City Office

2150 East 1300 South,

Suite 500
Salt Lake City, UT 84106

June 2020

<strong>Just like in the movie&#160;<em>Jaws</em>, people are wondering is it safe to go back in the water?</strong>

Just like in the movie Jaws, people are wondering is it safe to go back in the water?

Scenarios on many people’s minds:

  • Will it get better?
  • Will it get worse?
  • Will it never end?


With the Coronavirus pandemic continuing and social unrest spreading across the country, it is difficult to predict the future. From all outward appearances the bond and stock markets act like they are rallying. Is this an indicator that the bull market we enjoyed for so long is back? Or is this what is sometimes referred to as a bear market rally?


Those of you who know me will know I want to be in the room where it happens, in the middle of the financial process. Volatility signals change. Things have changed, some things for a time, and some things will be forever different. What served us well in the past may not do so in the future. One thing we know after a worldwide event such as the pandemic, is that the “new normal” will look different. September 11th changed air travel, the 2008 housing crisis changed the mortgage process and how comfortable many of us are in the world of finance.


Some changes will be short term.  At our house we have a hypochondriac joke: “it’s my COVID acting up.”  Short term oddity for three months does not mean the future of life indefinitely. Crisis is an anomaly and has never been a permanent decline in progress. Even as some things go down in value others go up.


  • The technology sector is doing well
  • Growth is outperforming value
  • Health technology shows potential



Some changes will be longer term. We all have our own opinions, but what if you are wrong? The best way to see into the future is not to bet on the horse that won the race last year or the year before, and for sure not to follow the crowd.  When you are betting on a horse race, look at the track, the horse, its health and fitness, as well as all of the other contenders and pick your winner.


Which changes are short and which ones are long term may be hard to predict.  Investing is different from horse racing in that you don’t put your money on one horse.  “Betting” on many horses, known as diversification, will give you a measure of protection, until it is safe to go back into the water. A well-diversified portfolio can include smart short-term focus and holding a sector or investment in anticipation of future upswings for the long-term. The right strategy for you and your holdings can only be determined by working with someone who can help you take the emotion out of the equations.  Someone who can help you look at your time horizon, your risk tolerance and most importantly, your goals.  Remember that investing can include having investments you don’t like in the portfolio, or watching your portfolio go down.


It is important during time of change, to look at things from many perspectives. Following fundamentals is important. Don’t believe everything you hear or see (the stock market rally).


Leading economic indicators are still falling. Two things to note– a leading indicator is one that helps determine economic changes and a lagging indicator follows economic changes.


Indices are a moving target—as of mid-May bullish leading indicators were plummeting, the data was ugly


  • Demand outpaces supply chain—Worst time since 1970
  • Retail industry was down 16%
  • Unemployment was up 14%
  • The energy sector was down, on average, 36%
  • DOW was down 13%
  • S AND P 500 was down 8%
  • VALUE Stocks were down 18%
  • More companies cut dividend this year than in the last 10 years.
  • More large well-known companies along with smaller ones are filing for bankruptcy



What are some of the key leading economic indicators and what are they indicating in your life?


  1. GDP and GDP Growth Rates: Gross Domestic Product is the most comprehensive economic indicator that gives valuable clues of a country’s economic condition. According to the “advance” estimate released by the Bureau of Economic Analysis the GDP decreased 4.8% in the first quarter of 2020.
  2. Debt, Debt ratios, and Debt cycles: What does your personal or company debt level look like now compared to a year ago?
  3. Inflation and Inflation Expectations: Are you paying more for good and services today? Toilet paper? Meat? Cars?
  4. Exchange Rate Stability: If you travel internationally or buy goods from other countries, how are exchange rates affecting your purchasing power?
  5. Interest Rates: Policy Rates and Treasury Bond Rates are down significantly year over year, did you refinance your debt?
  6. Gold and other metals prices: Prices have gone up, it’s often a place where people flee for safety.
  7. Stock Markets and Volatility: Are you feeling good, bad or worried?


Times are confusing and hard. Some areas I like include, utilities—(great dividends),cash equivalents, being selective and going wider with high quality international, small and mid-caps (SMID) staying short term in diversified fixed income.




We have a RepChat text line.  Securely send a text to 385-247-4030 for those important things that can’t wait. (No financial transactions request via text)


Envestnet Yodlee: You can link your mortgage, credit card, investments, bank accounts, etc. into Yodlee to see the larger picture of all your accounts in a secure world class data aggregation tool.



Stay healthy and stay strong.