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Hello, this is Jeremy Finger with Riverbend Wealth Management. Thank you for attending the call today. What we’re going to be going over today is how to handle market declines and before we get started, if you don’t know me, I have my own firm with Riverbend Wealth Management who uses fidelity investments, an 8 trillion dollar behemoth in the financial industry that is privately owned and as many of you may know there’s a tremendous service to their clients as well. Also gives them great service at low cost. I grew up not far from Myrtle Beach in Nichols, South Carolina, went to College of Charleston, got my degree in Biology and Chemistry with the emphasis in Business and been helping people make good financial decisions for over 23 years and I’m a certified Financial Planner and a Certified Investment Management Analyst and I got that certification at the Wharton School of Business. So that being said, let’s kind of jump right in and get started. You do have the ability to ask questions. There is a Q & A tab here now and I appreciate your patience with me. This is the first time I am using this technology but this is a wonderful thing in that as an advisor, being able to communicate timely, pertinent information to all involved in the safety and comfort of their home and at their convenience. It is just way it’s very efficient to do this and I look forward to doing these types of sharing information in the future. So let’s get started, always feel free to call me, email me with any questions and certainly use that Q & A tab. Market Declines, they are part of investing. So how often do they happen? Well as you can see here, there is a 10% more decline, 10% or more correction in the market happens about once a year and we are currently at the market lows. We’re very close to this number here, at the peak of the top to the peak of the bottom. We were very close to the 20% decline but that actually happened in December 2018. This is not unusual, okay? Declines are not unusual. When I do a financial plan for somebody I keep in mind, a financial plan encompasses their goals, objectives, how much money they need in income, when they need it, look at how much debt service debt they ,have what interest rate they’re paying, I look at the whole picture. The investment side of their assets is just one portion of an entire mosaic of what they have going on in their lives. Some of you may be retiring and taking income from these investments, others may be using this as a buying opportunity and adding money on a regular basis. So it is all dependent upon you and your financial plan so when this is normal, it happens often, once every four years, about once a year, about three times a year, okay? So market declines are part of investing. Feel free to ask questions, comment, hang on a second here, let me get rid of that again, really clear if they’re all drawing so here we go. Time in the market not timing, you know, everybody wants to know what’s the market going to do? What’s the market going to do and if you’re asked that question, nod your head if you do. People always want to know if that’s the case, what’s the case? Could anybody ever predicted this Coronavirus? Can you predict where interest rates are going up or down? No. I saw a study being done and they actually pulled former fair chairman, if they could predict what interest rates did on a regular basis and they got 60% of the their guesses were incorrect. So even the previous fair chairman’s was incorrect on where they think interest rates was going to be over the next year. So it’s difficult to have any prediction in the near-term basis. Now, staying fully invested, I say fully invested, according to what your needs are. Every S&P decline of 15% or more from 1929 to 2018, when the recovery was over, the average first year return was up nearly 55%. When is the recovery gonna happen? I do not know. Anybody who tells you they know, they don’t know, It could happen starting tomorrow, it could, my market was up today, it happened, this could be over. I don’t know, we don’t know so that’s why it’s very important to have a plan but what is the impact of selling out? If you did invest, let’s say in this example here, 10 years from 1/1/2009 to 2018, if you only missed the 10 best days of the market, the 10 best days only out of 10 years, your return, your $1,000 original investment grew to $2,700 if you were fully invested. If you only missed 10 days, it dropped by a third to $1,700 if you missed 10 days out of 10 years. It is incredibly important to make sure that when you are investing and things are turbulent that you seek counsel, okay? You’re doing a fantastic job by even being on this webinar, fantastic job. So you are actually seeking advice now on how to think about certain things and that is very, very good because when people are emotional, angry, upset, typically don’t make the smartest and rational decisions and so education and knowledge and counsel is one way to help reduce that risk. Emotions can be hazardous, of course, market tops, most people often buy there, because they’re greedy. Most people often sell at market bottoms, it’s easy to see and justify buying real estate when everybody’s making money in 2005. It is easy to justify all the reasons to sell when the stock market is down in 2008 or 2009. There’s all kinds of reasons to justify that behavior but thinking in terms of practical, logical ways in trying to reduce your emotional attachment to it is the best way to do it and how do you do that? Again, good counsel and a financial plan but how I want to decide this poll here is how many of y’all know somebody who sold when the market was down and that could be this year, 2018 could be 2008, how many of you know somebody who sold their investments when the markets were down? Wait for those polls to come in. Make a plan stick to it, I know you heard that, I know you heard me say that a few times already. So when I do a financial plan for somebody and look at what their guaranteed income is, whether that be social security or possible retention, what their debt is, what their payments are, what their interest rate is on their own that debt, how much money they need on a monthly basis? How much assets they have and when they need the income, is it today? Is it tomorrow? Is it 10 years from now? When a plan is designed, I design it in a way to expect periodic downturns in the market. It is expected, it’s built-in, it is absolutely built and designed to be able to stand these types of events. I’ve been a financial advisor for 23 years and I’ve got clients that have been retired with me for 23 years. They’ve gone through aging contagion back in the late 90s, they’ve gone through the dot-com bust, 9/11 crash, the real estate bust of ‘08, ‘09 and they’re still retired. How does that look on a real-life basis? Does that mean that their money never went down? That is absolutely not true. It’s not magical, okay? How it works in reality is instead of taking the family on a week vacation overseas or in Italy or Paris, maybe they go to Florida or Hilton Head. Instead of buying a Mercedes for a next vehicle, maybe they get a Toyota or maybe they wait. People change, people move. It is when things are a little bit tougher, people tighten their belts. When things are doing well, they spend a little more. It’s not that you set a plan and it’s fixed forever. I meet with my clients at least on an annual basis to update their overall plan and if things happen, either in the economy or with themselves individually, whether that be lose a job, gain a job, find out that they got sick, maybe have to take care of a loved one, they call me. Hey Jeremy, what happens if I need to do this or what happens if I want to buy my son a car or hey you know, he wants to go to graduate school, what are some of the best options for me to do? That’s life, that’s what happens and when someone knows your overall picture like myself. Hey, you know, Mr. Smith, it’s good for you to maybe in this particular instance, hey put money in the 529 plan get a state tax deduction possibly and fund it that way. You can do it multiple different ways, now, one awesome thing, one very cool thing here, because I’m an independent financial advisor using fidelity, I can help you, I can refer you to any number of institutions in the world to refinance your house, to do mortgages. I mean, I can do lines of credit from Goldman Sachs, from Tri-State Bank, from U.S. Bank, from multiple different institutions. When I am not holding to one company, I’m able to look out in the financial landscape and see which institution may offer you, the client, the best pricing. I get no kickbacks, no conflicts of interest on anything. I don’t use one institution, I can use many institutions and whichever one is the best for you because my pay is a fee based on advice and I’m agnostic on what you choose. So make a plan and stick to it. This is kind of cool here, so those of you who are not yet retired and you’re adding a certain dollar amount every month, you buy more shares when prices are low, more shares when prices are low and less shares when prices are high. Like in month four here, the price per share went up and the number of shares you bought went down and so but if the share price goes down, my goodness you’re able to buy many, many more shares when prices are lower and as a someone who’s saving for retirement. Really, I tell what I feel guys, take advantage of it. This is a good thing for you, you’re adding money, you are saving for retirement, you want it to go down so you can buy more shares but hey Jeremy, what about me? I’m retired, most of my clients are retired or right at retirement. They’re needing income, so what happens when this market goes down and I need to generate income for my life? Well, the portfolios that I’ve designed for people to generate income, first off, they’re not all in stocks, that’s number one. Number two, very diversified, I’ll get that in a moment, but they’re not taking out 100% of their money today. It is designed in a way for them to generate income for 20, 30, some instances 40 years. So what combinations of investments in today’s environment would give you, the client, the highest probability of success in generating income for you based on your goals for the rest of your life? That’s a mouthful, I know, but most of my clients, they get the money on a monthly basis and then have the rest of it invested. Yes, it goes up and down in value but owned over time it tends to do what it’s supposed to do. What is that, Jeremy? What is it supposed to do? How do we have this thing invested right? Diversification matters. Each one of these colors represents a different area of the investing world, Global Stocks, International Stocks, a global small cap, large company international bonds. Emerging stocks are like China and India, Global Small Cap Stocks for small companies overseas, international stocks and so on, U.S. bonds, cash and so this just represents different areas and on top here is the year and the higher you are on this chart, the better you did in that particular year and the lower, the worse you did and so on and so you see there really isn’t a pattern here. Of course it would have been nice to be at all in the U.S. here, right? But then you know, 2018, the market went down and here you go losing 4.38%, so every one of my clients has a portion of their money in each one of these areas and it’s designed that way so that when crap hits the fan like it does here recently, all of your money doesn’t go down. So cash and bonds recently have done fantastically well to help alleviate some of the downside they may have experienced in international stocks or global stocks or wherever else and so it is designed in a way to over time generate either income now or income later for your specific financial plan. So again, this is a different way to diversify investments. Thank you for your patience, I’m getting the hang of this. So bonds, which are the U.S. bonds right here, they’re like, Jeremy it’s only getting 0.101 % this year. Why do you have that? Well when things go down, when markets happen and things and assets go down, bonds tend to do well. In the flash crash it was up 3% U.S. debt downgrade up 5 and so on. So when stocks go down which is represented by the pink here, the S&P 500, bonds tend to hold up quite well, okay? Yes, that polls came in, many of you know knew of someone who sold their investments when the market was down. Here’s the thing, let’s say for instance that you sell, and market goes down after you sell. Well, you have to be right a second time on when to get back in or when to get back into the market. So you got to be right twice and which is nearly impossible to do. I’ve never seen anybody do it, that’s the equivalent of someone, oh hey I’m playing a slot machine and I win some money playing a slot machine and that person all of a sudden thinking that a slot machine is a good investment. It is not a good investment, the odds are against you and doing and repeating that behavior over and over again. It’s just not realistic. Thank you for the poll there. So bonds and diversification help alleviate some of the downturns, perfect. There’s a difference between being a player in the casino, pulling on the slot machine and being the casino owner. The owner of the casino has the odds in their favor, okay? Hey, can someone get lucky? Yes, that’s true, but over time the casino normally wins, so the same way goes with investing.  These are 10 year average annual returns, the average annual return from, call it from 1937 or 1936 on for a 10-year average is around 10%. Some years, a 10-year average is over 20. Some years it’s nearly zero, we had one recently from 2000 to 2010. I mean it was right at zero so well, what happened? Well, so there are dividends that are paid on the on the S&P 500, there’s interest on bonds because you don’t have all your money in S&P 500 stocks, there’s other types of things, you’ve got guaranteed income from your other other sources. Like again, I’ve had clients who’ve been with me since the very first year I started the business in 1997. And they are still retired, they play golf you know, they go out to dinner, they have drinks and they live their life and so we’ve been able to you know, update plans and make decisions and move along in the financial environment as life comes at us and as life goes on. So, what are the takeaways here again? Number one, have a plan. Make the plan and stick to it. So have a plan, when you have a plan, it’s easier to be less emotionally attached to what’s going on the tube on a daily basis. Next week I’m doing a webinar that’s going to be on how financial markets and media affect investments and affect the news. There certainly is some movement when the media says one thing and does that, that’s true. That is true, but if you think in terms of long term and your overall plan is like, well Jeremy, I’m 62, I need to live off this money well yeah, guess what? We have to prepare as a financial advisor, I’m going to prepare for you to live for another… I’m going to call it another 35 years. If not that you cash it all out you stick it under your mattress and you live for another 35 years off the money there, you have to do what’s practical and designed to do what it’s supposed to do over a 35-year period. So have a plan, okay? Think in terms of being less emotional. Review your plan, update it and if things go down, are you gonna be okay? If you can invest, my goodness, invest. If you’re retired, the worst thing you can do is sell, the second best thing you could do is stay put, because the dividends you’re getting on some of your investments are reinvesting, hopefully, back in at lower prices so without you lifting a finger you’re buying more shares at for when prices are low. By the way, ask me any questions, if you want to. Emotions, yeah, a lot of times when we’re angry we don’t make the best decisions. Understanding when people are fearful or angry, oftentimes, good decisions aren’t made. Make a plan to stick to it, remember diversification bonds even though they may not pay as much as stocks and stocks do great. They help alleviate some of the downside when they don’t do so well and long term. Markets average over 10%. I’m not saying that’s what’s gonna average in the future and I do not know when the recovery is going to happen, but the odds are in your favor. If you do a plan, customize for your needs, you live within your means, you consult a certified financial planner like myself, your odds are going to be in your favor of being okay. So the markets are down, yeah, for now, how long? We don’t know. What can you do? Get your plan reviewed, I talked to someone, no joke, this was a couple months ago. He had a 401k, he left his previous employer and a decent size 401K and I’m like hey man you know, you’re taking a lot of risk in this 401K. You’re telling me that you’re conservative but this 401K is very aggressive and so with my advice, he changed it from like a 90/10 stockpile portfolio to a 60/40 portfolio. I mean that probably saved him probably $150,000, unaware of the risk that he was taking so it’s important to have your plan reviewed. One other thing you can do in today’s environment interest rates are very, very low, check on refinances. The cool thing about where I’m at right now is that I can refer business to Anderson Brothers Bank, Cresco Bank, South State Bank, Guild Mortgage, you name it. There are so many different providers out there of banking relationships that I’m able to refer people now instead of just one institution. I do want to talk a little bit about what’s going on in the environment right now. So I can get research from Goldman Sachs, JP Morgan Fidelity, Capital Group, Blackrock. Trillions and trillions and trillions of dollars worth of research and looking at the the virus and where earnings are and whatever, it could have an impact on the GDP. I mean it could have an impact on markets. Is it priced into the stock market today? I don’t know. What can happen? We don’t know what can happen in the short term but according to all of those institutions and all of their research, we could have a v-shaped recovery. What’s a v-shape recovery? Well, when the recovery does happen, it happens really fast. When will that happen? I don’t know, it could be next week, could be next month, it could be six months, it could be drawn out a little bit, don’t know. Hey Jeremy, why don’t we sell out and then wait for things to settle down? Why? Why would we not do that? Because if we miss even the little, just very few days of recovery, it has a dramatic impact on your overall return. A dramatic impact on your overall return, so think of downturns as expected, okay? It’s just part of investing, you know, it’s the equivalent of you going home and finding out that your air conditioner broke and you need to get it fixed. Do you like it? No, you don’t like it but it’s just you hopefully have built in enough cash where you could handle that and you fix it and move on. That’s how it works but any questions? No questions, all right. So next week, I’m gonna send out an invitation, we’re gonna do a webinar on the media’s influence on the market. I’ve got a guy, a really good guy, he’s going to be talking about that and I’ll send that out but any questions at all, whatsoever give me a call at 843-222-6602 or send me an email, Jeremy@RiverbendWM.com and thank you very much. Bye!