Addressing the Elephant in the Room
We like to have open dialogue, communication and discussion with our clients. Especially during times when we have volatility and news coming at you left and right. Fi Plan Partners wants to keep you updated on a regular basis, not only with this vlog, but also from the standpoint of emails, conversations and in-person or shareware meetings.
Over the weekend the Fed took the unprecedented action of cutting rates over the weekend on Sunday. They have never done anything like this over a weekend. We think that is important that they came out and were proactive. They cut rates to 0% on the overnight lending rate as well as agreed to buy another $700 billion worth of bonds. They will buy $500 billion in treasuries and $200 billion in mortgages. It’s important that the Fed is providing liquidity to banking system. The banking system can then provide liquidity to business owners. If you are a small business and having to shutdown for weeks you more than likely don’t have billions of dollars worth of cash. You might be going week to week with your cash flow. Now the banking system can help with loans given the move by the Fed. It’s very important that we keep this health issue from becoming a financial market contagion. Therefore, the Fed is taking proactive steps. If they would of waited its unknown what uncertainty would be.
A couple of weeks ago in a vlog we mentioned that when this virus dissipates that there are a lot of good things at the end of the tunnel. The trade deals were made and the Fed was on deck ready to help. There are a lot of people asking if now is the time to go into the markets. There is 35% of the S&P 500 companies that have dividend yields higher than the U.S. treasury yields. Yes, there are opportunities but caution is needed at this time. Take a deep breath because this virus event not a fundamental problem in the system. A lot of the market volatility has to do with massive fear and we just want to bring the facts to the table.
Greg Powell, CIMA®
President and CEO
Email Greg Powell here
Bobby Norman, CFP®, AIF®
Senior Vice President
Email Bobby Norman here
Trey Booth, CFA®, AIF®
Senior Vice President
Email Trey Booth here
Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth in this presentation may not develop as predicted. No strategy can ensure success or protect against a loss. Stock investing involves risk including potential loss of principal.
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