resources

Winter 2020

Dire Predictions Fail

Think back to October, if you will.  We all had some concern that the U.S. elections were going to disrupt the stock and bond markets, perhaps leading to significant losses.  And, even if the market brushed off the election results, what would be the market reaction to a sitting President unwilling to except the outcome?  Surely, that would be a dire situation that inevitably led to market losses, and maybe market collapse.  Further, what would happen if one major party controlled the White House, U.S. Senate and House of Representatives?  Certainly, that would be a calamity of major proportion!

So, as we come to end of 2020, the election brought a change in the Presidency and the Democrat won.  The incumbent President has not accepted the validity of the election results.  And, in a matter of days, control of the U.S. Senate will be decided in two runoff races in Georgia.  We make no pretenses of knowing what the outcome may be, but it is possible that one political party will then control the Presidency, the Senate, and the House.  The horror!

With all these political events, how did we fare in the predictions of disaster and market mayhem?  The market took the election results, assertions of election fraud and possible control by one party in stride.  The dire predictions failed miserably.  Instead, the stock market has flourished and hit all-time highs.  Investors are enjoying historic comebacks from the March market lows and 2020 will end with strong returns.

So, what did we learn?  We may have learned, once again, that markets are resilient.  We may have learned that the focus of the markets is the future revenues and earnings of corporations.  We may have learned that markets can tolerate political change without panic.  Or maybe we have not learned anything at all.  So, the next time we hear the pundits shout that the stock market will collapse by a thousand points when X, Y or Z happens…please take a deep breath and remember that markets have normal fluctuations, ups and downs, but eventually come back and reward investors who persevere.  That is the lesson of 2020.

You said what?

This Fall, we asked clients to fill out a survey to help us understand how we are doing in support of family goals, client service and investment performance.  Fifty-one client households responded and here is what you said:

  • “I always receive timely responses to my phone call and service requests” 100% said they agreed!
  • “When I have needed funds, I received the money in a timely way”

98% said they agreed!

  • “When I have needed financial advice, I have been pleased with the quality and timeliness of the advice”

100% agreed!

  • “I feel that my Money Guide Pro Plan reflects my financial goals and I have faith in the Plan’s Probability of Success for my money lasting for a lifetime” 100% agreed!
  • “I believe that my individual portfolio returns are better than the market’s average returns” 98% agreed!
  • “How often did you log onto the Schwab Alliance website or Schwab mobile app?”

51% said monthly, 14% said quarterly, 2% said annually and 33% said not at all.

  • “Do you have difficulties logging into our Client Communication Porta and/or Schwab Alliance or the Schwab mobile app?”

65% said no, 24% said sometimes and 11% said yes.

  • “How often do our log onto our Client Communication Portal for advisor fee notices, performance reports, and access to your Money Guide Pro Plan?”

10% said weekly, 20% said monthly, 31% said quarterly, 6% said annually, and 33% not at all.

  • “Do you value the periodic newsletter produced by Compass Rose” 100% agreed!
  • “I work with Compass Rose for the following reasons”

84% said they valued their financial plan

78% said they valued the portfolio returns

72% said they felt that they get their money’s worth

98% said they like working with the people at Compass Rose

  • “In what areas can we improve?”

4% said client service, 12% said financial planning, 6% said investments, and16% said communications.

  • “Are you aware that Compass Rose provides advice and support in the following areas?”

51% said tax planning

67% said estate planning

37% said life insurance

49% said annuities

37% said charitable giving

45% said college planning

75% said 401k/403b advice

  • “Please rate the likelihood that you would refer someone to Compass Rose?”

77% said very likely, 26% said likely, and 3% said somewhat likely.

  • “What else could Compass Rose provide to improve our services to you as our client that we currently do no or have not provided”

Nothing was the most common response. Occasional “understanding investing” topics by email and the ability to schedule ACH deposits to Schwab accounts without pushing paper were also mentioned.

First off, we want to thank all who responded to the survey.  When you ask for honest feedback from your clients, you must be prepared to hear some unpleasantries.  Nevertheless, the survey results show that you hold us in high esteem and that you are quite happy with us.  Best of all you like us as people and professionals.  We love working with you too!  And we respect your viewpoints and the time it takes to work effectively with a Financial Advisor.

We will incorporate the feedback as we try to get better in the coming year.  You have said clearly that it would be nice to have less paperwork, more communication and educational content.  We can do that and promise we will.  Again, thank you for the praise and the trust you show in us.  We are humbled.

Quick Takes

  • For clients with taxable accounts, we have been making hundreds of phone calls to update you on your realized gains and losses for the year. We want you to hear about your possible tax situation well in advance of preparing your tax return. We want no surprises.  If you have not heard from us, you have very minor tax consequences due to portfolio trades in 2020.
  • Reminder, you can still make IRA, Roth IRA, and other contributions up until your tax filing deadline for 2020. Please call us to clarify your goals and timetables.
  • Bad news, for those of you that look forward to Boston Celtics tickets from us each year, the pandemic has wiped out in-person attendance to at least March. However, it is likely that we are not allowed back in the stands till Summer (the playoffs) and maybe not this next Fall if the vaccination process does not proceed according to the current plan. Good news:  we will distribute tickets whenever the NBA determines that it safe to go back.  In the meantime, we have a young, talented, and exciting team to watch…thank God for little things like this in the pandemic.
  • Winter Solstice is now in the rear-view mirror. Days are starting to get longer with more sun each day. We look forward to June when the sun sets at 9:00 PM and we can have a normal life in the warmth, including restoration of family life, sports, games and reading a book on the beach.  Take heart, it will happen!
  • Let us give thanks to all the scientists, logistics personnel and nurses who are systematically rolling out a vaccine distribution process that will save lives, restore the economy, and get people back to work. There are angels among us! Happy New Year to all.