Client Newsletter 1Q21
Dear Ambassador Family,
I hope you enjoyed a Merry Christmas and a wonderful New Year!
Our office is looking forward to what this new year will bring.
Quick Recap of 2020
A quick glance at your December statement might give you the impression that 2020 was smooth sailing. Unfortunately, that was not the case.
Do you remember the last time you were on a wooden rollercoaster? Your car trudges upward as you enjoy the view. Suddenly, the track disappears! You race towards the ground and fly around corner after corner.
That’s a good depiction of 2020.
Here’s a quick recap:
- Market started out with a bang in January
- Coronavirus hit the U.S. / world
- Market dropped nearly -40% from February to March
- Government went into rescue/bailout mode
- Treasury went on a money printing spree
- The Fed lowered rates and kept them at near-zero
- By 4th quarter, markets recovered and ended positive
It’s important to look back on where we came from. For those of you with a Financial Plan in place, you were able to stomach the wild ride of 2020.
How We Manage Your Money
A client recently asked me how I managed their money, especially with so much volatility. How do I know when/what to sell and when/what to buy?
You might have seen a lot of activity on your accounts this last year. 2020 was a very challenging and unusual year.
We had to react quickly, stay vigilant, and be innovative to follow new trends in the economy. Things that worked before, stopped working, and vice versa.
Additionally, I have to make decisions for each of my clients based on their personal situation with the information I had.
My hope is to have enough information about each of my client’s finances to keep them on the right track.
The four big questions I try to answer are:
- Do you need money to live off of your investments?
- What kind of risk can you tolerate?
- Where is the market going?
- Are there any other factors I need to be aware of?
For those who have a very close relationship with us, we know where you stand and can act proactively for you, no matter what the market throws our way. Most of you have a Financial Plan in place and know what to expect during the good and rough seasons.
If you are still on the fence about scheduling a planning session, know that both you and we can benefit. I will be more informed of what your goals, needs, and plans are. You can have greater peace of mind knowing we have your back and will act in your best interest.
The more you share with us, the more beneficial it can be for you.
Who Benefits the Most? (*Hint* It is not necessarily how much you have!)
Our top clients who reap the most benefits from me do these 3 things:
- You engage with me because you see the value of getting the most out of us in a relationship.
- You share information so I am better informed on seeking to protect you and when to take opportunities.
- You introduce us to your other professionals so we can work as a team to optimize your planning strategies.
Clients who pay taxes can save money by having us explore and execute tax harvesting, Roth conversions, and RMD distribution strategies for you.
Do you know anyone who struggles with these roadblocks to financial success? (See the sidebar below.).
What Happens When You Don’t Engage?
From my experience, clients are tempted to quickly become disengaged, passive, and lose sight of the big picture.
When we feel we’re missing information, we are forced to exercise caution, even for clients who could be taking more risks.
Disengaged clients can often experience fear and emotions without a plan to keep them grounded. Not willing to invest, because of fear, or staying out of the market because of emotions.
We serve you best when we are proactive. There is still time to engage and benefit more fully from working with us.
What to Expect in 2021:
- The Market. Expect volatility – a new roller coaster ride?
- A New Administration. Many things will change, including higher taxes and more regulations.
- Taxes. Regardless of what happens in the market or the new administration, there will be tax changes. RMDs are back.
How Are We Watching Out for You?
We will be vigilant on investments and diversification, focusing on opportunities that will benefit from higher government spending.
Heading into 2021, we are less confident on things like fixed income that are dependent on interest rates staying low forever.
Inflation is also on the top of our minds.
Petr Burunov, CFP®
President / Wealth Strategist