2020 – BFG Q1 Webinar
Multiple Ways to “Distance”
Market Performance Recap Q1 YTD 2019 Stock Markets Domestic Large Cap Equity Index 1 -20.2% -20.2% 31.4% Domestic Small Cap Equity Index 2 -30.6% -30.6% 25.5% International Developed Equity Index 3 -22.7% -22.7% 22.7% International Emerging Market Equity Index 4 -23.6% -23.6% 18.9% Q1 YTD 2019 Bond & Commodity Markets U.S. Bonds Index 5 -0.33% -0.33% 6.8% Commodity Index 6 -23.3% -23.3% 7.7% 1 Russell 1000 Index, 2 Russell 2000 Index, 3 MSCI EAFE Index, 4 MSCI Emerging Markets Index, 5 Barclays Capital U.S. Aggregate Bond Index, 6 Bloomberg Commodity Index
Q1 2020 – Pandemic Impact
BFG Portfolio Tactical Positions Overweight Underweight U.S. Equities International Equities Technology High Volatility Low-Volatility High Yield Debt Dividend Stocks Cash
Coronavirus – Current & Future Impact
Covid-19 Trajectory Source: statista.com – 4/15/2020
Covid-19- Per Capita Basis Source: statista.com – 4/15/2020
Initial Jobless Claims – Unprecedented
Social Distancing Impact - Employment
Social Distancing Impact - Spending
Oil Prices Plummeting Source: statista.com – 4/20/2020
Cars & Trucks – 40% Share
Current Environment • Stock market is not reflective of economic conditions • Job Losses – 26 MILLION in five weeks • We’ve now lost every job created since 2009 • 9 Million jobs loss during entire 2007-2009 Recession • We can’t flip a switch for entire economy • Georgia today will be a good test case • Need to be prepared for what’s to come • CDC predicts 2 nd wave in the fall • Guidelines may be just as strict
Federal Goverment Intervention
Fed Response – Strong & Fast
Fed Intervention at What Cost
Fed Increases Bond Holdings Source: All Federal Reserve Banks: Total Assets, Trillions of Dollars, seasonally adjusted. Weekly data as of 4/8/2020.
Interest as a % of GDP Source: https://www.collaborativefund.com/blog/who-pays-for-this/
Client Questions 1. I would like to hear from you regarding the Federal Deficit. Sometime this summer or fall the deficit is going to move to the untenable position of debt interest beyond GDP. How are you going to protect our investments in light of this? 2. Now that the federal government is passing out massive relief packages $2 trillion / $484 Billion, what may happen next to the US dollar this year 2020 / 5 years?? Any indicators yet regarding US dollar inflation compared to events in 1913 - 1940 - 1951 - 1975 - 1979 etc.? This is not a simple question, at least until the economy settles to a new normal.
Debt & Inflation
Gold & Inflation
U.S. Dollar vs Gold Gold U.S. Dollar Source: Macrotrends
CARES Act – Key Points
CARES Act – Key Points • Required Minimum Distributions are waived for 2020 for all IRAs, 401(k)s, 403(b)s & Inherited IRAs • The taxing filing and tax payment date is delayed until July 15 th • Estimated tax payments due April 15 th and June 15 th are delayed until July 15 th • Up to $100,000 can be taken from a 401(k) or 403(b) plan either through a loan or a distribution if you or your family has been impacted by COVID 19 • If you take a standard deduction, you can now deduct $300 of charitable giving in 2020
Portfolio Perspective
This Recovery Will Take Time
Sectors Impacted the Most
Emerging Markets Outlook Source: statista.com – 4/9/2020
Is a V-Recovery Possible Source: statista.com – 4/15/2020
Expectations for Longer Impact Source: statista.com – 4/15/2020
Recovery Similar to 2018? Q4 2018 – Q1 2019 YTD 2020
Valuations Changing by the Day
What This Means Going Forward V, U, L, W recovery? How fast can we get back to normal? Is there a new “normal?”
Client Questions 1. What specifically is the strategy to reinvest cash into back into equities? What metrics will indicate that move? When that time comes, what positions are you considering buying and/or adding to? 2.When would Bouchey Financial stock pickers guesstimate would be their choice as to a fair set of parameters to buy back in? I know you have no crystal ball..but your heads are better than ours.
Disclosure Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Bouchey Financial Group, Ltd.), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Bouchey Financial Group, Ltd.. Please remember to contact Bouchey Financial Group, Ltd., in writing , if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. Bouchey Financial Group, Ltd. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the Bouchey Financial Group, Ltd.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.
Q & A Follow-up Questions please contact us at: Office Phone: 518-720-3333 Email Contact: planningpaysoff@Bouchey.com
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