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Market Comment from Pacific Wealth Management (April)

Investing Insights

    • The unemployment rate now exceeds 16%.
    • The unprecedented monetary and fiscal response demonstrates a willingness to “do whatever it takes” to backstop our economy.
    • We anticipate the continuation of elevated volatility as economic news and corporate earnings are likely to remain terrible through much of the first half of the year.
    • We have begun to transition our portfolio holdings from actively managed mutual funds to ETFs in order to optimize the efficiency and performance of our portfolios.
    • We are pleased to announce our Financial Analyst and Wealth Planner, J.P. Mayer has recently achieved his Certified Financial Planner credential
     
    We hope you, your family, and employees are remaining healthy, sheltering well, and weathering this surreal COVID-19 experience.

    Large portions of the U.S. and global economy remain frozen in an effort to control the spread of the Coronavirus. So far, 26.45 million Americans (out of 162.9 million total workers) have filed for unemployment. As we progress further into recession, the only questions are how deep will it go and how long will it last?

    Our U.S. Federal Reserve Bank is following the same strategy they employed during the banking crisis a decade ago. However, this time they have responded faster and even more substantially with an almost $3 Trillion “do whatever it takes” commitment to backstop our economy. We are seeing encouraging signs the pace of the pandemic is beginning to slow and many are beginning to anticipate a reopening of the economy in certain areas. In the meantime, the economic news and corporate earnings are likely to remain terrible through much of the first half of the year. We expect volatility to remain high, up and down, until the financial markets have confidence the outlook for 2021 and beyond is improving.

    Pacific Wealth Management’s 'Proactive Asset Management' discipline is grounded in data and analytics. The recent unprecedented financial market volatility has prompted changes in our investment portfolios as a result of this discipline. In an effort to mitigate volatility and simultaneously improve performance and decrease costs within your portfolios, we have swapped two of our actively managed mutual funds for exchange-traded funds (ETFs). We believe these ETFs will have a greater ability to participate in the upcoming recovery as markets rebound from this challenging period. While we don’t expect the recovery to be a smooth ride or even a “V-shaped” rebound, we do anticipate markets returning to higher levels in the months and years ahead.

    We are pleased to announce our Financial Analyst and Wealth Planner, J.P. Mayer has recently achieved his Certified Financial Planner credential. The CFP® certification is recognized as the standard of excellence for financial and wealth practitioners committed to putting clients’ interests first. Congratulations J.P.!

    Please let us know if you have any concerns or questions regarding the financial markets or high-net-worth wealth planning.

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