The news headlines over the past weeks have been riddled with two serious threats to the health and wellbeing of people across the U.S. The first and obvious threat is the novel coronavirus (COVID-19) outbreak. The less obvious danger, lurking beneath the surface, despite its daily limelight, is the stock market, which entered bear market territory for the first time in 11 years.

History tells us that pandemics like the coronavirus will emerge and are hard to control in the early stages. Once they are here, preventative actions can be taken and vaccines can be developed, but no one can possibly predict when, how or why a health crisis like this will occur.

Bear markets are both similar and different. No one can predict when a bear market is going to begin, but we have observed over time that bear markets are going to happen — about once every three to four years, in fact. And because we can predict that they will happen, we can prepare ourselves to best take advantage of those opportunities when they do happen.

Steer through the curve

In the world of competitive car racing, they say that races are won and lost in the curves. Similarly, in the world of investing, success is driven (or stalled) in times like these through your actions and inactions. There is a tremendous challenge in financial decisions, however, when panic strikes the world like it has recently. Panic — caused by this sudden “curve” in the market — naturally creates added stress and fear for everyone, inhibiting the ability to make sound and opportunistic financial decisions.

But there are wise decisions to be made in the midst of this bear market. As Warren Buffet says, “you should be fearful when others are greedy and greedy when others are fearful.” If you sell now, you are selling at a low point. Now should be the time to hold the course and stick to a well-defined financial and investment plan that is tailored to your particular situation. We often find in times like these that a big part of our job as advisors to wealthy families is to make sure that fear of the unknown does not erode their ability to stick to the plan that has proven to withstand the test of time.

Need help now? Schedule a phone call with us to talk.

Contact Us

Turn a negative into a positive

The current financial climate actually offers some financial opportunities that can help you grow wealth for generations to come. A few examples:

  • This can be a great time for Roth IRA conversions, especially for intragenerational family wealth transfer strategies.
  • The low interest rate environment has created a great opportunity to refinance existing long-term debt or intra-family loans and potentially increase principal amount of an intra-family loan for a greater family generational wealth transfer opportunity at these suppressed values. Some of our clients have elected to borrow at these lower rates to invest long term.  You need to realize that borrowing to invest creates its own considerations.
  • Executives with non-qualified stock options should strongly consider executing those options today to reduce future tax bills.

For wealthy investors, there are a multitude of other opportunities that, based upon your own situation, could be relevant and build wealth. With a well-constructed plan that is tailored to your unique circumstances, you can turn negative market events like the ones seen today into positive opportunities.

Tune out the noise

One of the biggest hurdles to both sound and opportunistic financial decision is, frankly, the financial media “show business.” In our minds, the proliferation of financial news that constantly barrages the public with the latest shocking development has actually been a contributor to the speed at which bear markets like the current one accelerate. Mere months ago, we were perched upon all-time high markets, with strong earnings and a healthy financial system. Since then, we have experienced the fastest decline ever into bear market territory. The relative speed of these markets, fueled, in part, by panic spread over the airwaves and in social media feeds, makes it even more challenging to make the sound financial decisions and pull the trigger on the opportunistic ones.

Ultimately, in times like these, we all must focus on what we can control to mitigate the threats posed to both our health and our wealth. While knowledge of the coronavirus evolves, we will learn more about how to manage that threat. But we already have the knowledge and tools at our disposal to mitigate any impact that a bear market might have to our and our families’ wellbeing.


Want to talk with a member of our team about what to do with your money during the COVID-19 outbreak? Fill out the form below and we’ll be in touch.

John Waldron

Founder & CEO

Hall of