What’s the Real Return on 12 Month CDs?

PFG Private Wealth Management, LLC is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. This material and information are not intended to provide tax or legal advice.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.  Insurance products and services are offered and sold through Perry Financial Group and individually licensed and appointed insurance agents.

S&P 500 Performance During Epidemics

After weeks of headlines about the coronavirus outbreak, markets have been caught in a volatile pattern of surges and retreats. Here’s what you should know:

Why are markets so volatile?

Disease outbreaks are hard to predict and come with a great deal of uncertainty that can make investors nervous—particularly after a period of record market gains.

As the epidemic spreads beyond China, investors worry that it could cause serious disruptions to trade and the interconnected global economy.

How long will the volatility last?

It’s hard to say. Though the human cost of an outbreak like Coronavirus is tragic, it’s unclear how

widespread the economic fallout will actually be. We can’t predict what markets will do, but this isn’t the first time we’ve grappled with market reactions to an epidemic.

Here are some examples from previous outbreaks:

Chart source: CNBC, Yahoo Finance

Though the past can’t predict the future, we can see that historically, markets reacted to epidemics with panic selling but recovered after the initial outbreak. However, epidemics don’t happen in isolation; the underlying economic and market fundamentals will influence how investors react long-term.

Pullbacks and periods of volatility happen regularly, for many reasons.

Whether the cause is an epidemic, geopolitical crisis, natural disaster, or financial issue, markets often react negatively to bad news and then recover. Sometimes, the push-and-pull can go on for weeks and months, which can be stressful, even when it’s a normal part of the market cycle.

The best thing you can do is stick to your strategies and avoid emotional decision-making. Why? Because emotional reactions don’t lead to smart investing decisions. The biggest mistake investors can make right now is to overreact instead of sticking to their strategies.

We’re keeping an eye on how the epidemic may affect our clients and will be in contact if adjustments to your strategies need to be made.

Have questions about your personal situation? Don’t hesitate to call our office at (813) 286-7776.

PFG PRIVATE WEALTH MANAGEMENT, LLC
www.pfgprivatewealth.com

Chart Source:

S&P 500 performance during outbreak:
https://www.cnbc.com/2020/02/24/avoid-this-investing-mistake-as-coronavirus-fearsgrip-the-markets.html
S&P 500 performance six months after outbreak: Yahoo Finance. 6-month performance between open of first trading day of the month after end of outbreak to adjusted close of final trading day of the sixth month.
SARS: April 1, 2003 – Sept 30, 2003
MERS: Dec 3, 2012 – May 31, 2013
Ebola: March 3, 2014 – Aug 29, 2014
Zika: March 1, 2016 – Aug 31, 2016

PFG Private Wealth Management, LLC is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. This material and information are not intended to provide tax or legal advice.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance. 

The Impact of Coronavirus for Investors

What we’re doing with our portfolios:

Public health outbreaks and epidemics like the recent coronavirus can quickly scare investors and, eventually, affect economies and businesses. The recent coronavirus outbreak has shut down airports, halted trade, and led to the rapid construction of new hospitals in China. The effects of the outbreak may push China’s economy into a period of slower growth, with stocks trading lower as investors seek protection.

So, what does that mean for the portfolios we run?

Key Takeaways

  • Looking at nine major outbreaks since 1998, there is little evidence linking global epidemics with long-term investment fundamentals.
  • The Chinese economy may slow, perhaps even meaningfully, but that is not a reason to invest or divest. Long-term investing is often best disconnected from short-term economic reactions, so we implore investors to maintain their focus on what matters.
  • Across the portfolios we run, we do have a relatively small exposure to Chinese assets (both directly and indirectly) but remain confident these holdings will deliver positive outcomes for long-term investors.

Rest assured our portfolio managers are closely monitoring your investments.  Please reach out to your advisor with any questions.

PFG Private Wealth Management, LLC

Year-End Donations & Giving

A list of things to consider as you think about year-end charitable donations

With its blinking lights, family traditions, and festive music, December is the most wonderful time of the year. And according to Charity Navigator, the month of December really is wonderful because December sees approximately 30% of all annual charitable giving occur.

Unfortunately, despite the greatest of intentions, many will inevitably make mistakes in how they give, especially if they wait until the last minute. So, here is a list of things for you to think about as you consider your year-end charitable donations.

Make a Plan
Last year, donations from America’s individuals, estates, foundations and corporations reached approximately $410 billion, according to Giving USA in their Annual Report on Philanthropy. Hoping that 2020 is similar, that means you and your neighbors will donate over $120+ billion dollars in December alone!

How much of this was more impulse-giving vs. a well-thought-out charity plan?

Ideally, at the beginning of every year – with your financial advisor – you would map out a plan to maximize the tax benefits of your giving. Really think through what is important to you and what you want to support. Is it an organization that supports literacy? Or provides food? Or shelter for families? Creating a plan will help you be less reactive and feel less boxed in when friends ask for your charitable support.

Research Your Charity
It’s easy to get fooled by a charity’s name so you need to do your homework. And beware of scam artists pretending to represent an organization that doesn’t exist. Read a charity’s financial statements to see how they spend their (your) money. Even better, volunteer before you write a check.

Donating Stock
If you have owned stock for more than a year and it has appreciated, then don’t sell it first and then give the cash to charity. Those appreciated assets can be donated directly to charity without you or the charity incurring capital gains taxes (consult your tax professional to be sure).

Selling Your Personal Info
Quite a few charities will rent or sell the addresses, phone numbers, email addresses and detailed social media profiles of their donors, which means you might start getting a bunch of unwanted calls, emails and friend requests. Make sure you review a charity’s privacy policy before you give them your information. And many times, you have to actively “Opt Out” to ensure your personal information is not used.

Ask for A Receipt
Remember, for charitable contributions of $250 or more, you need a donor’s acknowledgement letter. And generally it’s a good idea to obtain receipts, especially when donating goods.

Don’t Delay
Shockingly, a whopping 12% of all giving occurs in the last 3 days of the year! But if you mail a check postmarked after December 31st, then you might run into trouble. Make it easy on yourself and don’t wait until the last minute.

Money Can’t Buy Happiness, But Maybe Donating to Charity Can?
Consider research from Elizabeth Dunn of the University of British Columbia, Lara Aknin at Simon Fraser University and Michael Norton at Harvard Business School. Essentially what they found in their study is the following:

  • Spending money on other people has a more positive impact on happiness than spending money on oneself
  • Spending more of one’s income on others predicted greater happiness

Discuss with Your Financial Advisor
If you have any questions or need help mapping out your Charitable Plan, set an appointment to discuss with your financial advisor.

PFG Private Wealth Management, LLC is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. This material and information are not intended to provide tax or legal advice.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance. 

How to Control Holiday Spending

If advertisements and commercials are beginning to feature scenes of happy families, clad in brightly colored sweaters, gathered by a fire, surrounded by an assortment of presents, then the countdown to the holidays has begun. Although it may be a joyous time that reunites old friends and distant family members, one dilemma you may face is how can you avoid the pressure to overspend, yet still have the pleasure of buying presents for your family and friends? 

The key strategy is to plan ahead. Begin by writing down the names of those you plan to buy for—at least one gift idea for each person on your list—including a general idea of where you might find his or her gift. If you don’t know what type of gift you would like to give, browse through mail order catalogs, TV advertisements, and newspaper flyers for some ideas. This could help you avoid the trap of making your decision while in the store—when impulse buying may cost you more than you wish to spend.

Setting a limit on the number—and cost—of the gifts you plan to buy can help you stay within your budget and allow you to purchase appropriate gifts for the special people in your life. Once you have your list, and estimate the cost of your proposed purchases, you can adjust it so the total expenditures fit into your holiday budget.

Shopping Strategy

To prevent overextending yourself, keep the following principles in mind:

  • Shopping early and using the layaway plans offered by many stores might help you complete your shopping before the “holiday rush” begins. However, you may want to remember that some of the better sales come closer to the holidays.

  • Whenever possible, pay by cash or check, rather than by credit cards. High interest rates and the enticement to “pay later” may lead to a larger debt than you can afford.

  • Consider exchanging names among a group of friends or family with a set dollar limit to purchase a gift for one person. Remember, it’s quality, not quantity that matters when giving.

  • Think about pooling your resources with other family members to buy gifts for individuals, particularly if it involves a rather expensive
    present.

  • When in doubt, purchase a gift certificate from a person’s favorite store. With this type of gift you avoid overspending because you are purchasing a pre-determined amount. Chances are, your loved one will have some fun picking out the item they desire.

  • Look to purchase “stocking stuffers” at a discount store all in one trip. This will help you avoid impulse buys.

  • Prevent the “return blues” by saving all your receipts for gifts in one envelope. Label each slip with the items you purchased, where you purchased them, and for whom.
  • Handmade gifts and cards are sometimes the best gifts received. Use your creativity and talent to give the gift of yourself, it’s often a personal touch that is greatly appreciated!

Taking an organized approach to holiday shopping can make the experience enjoyable for many reasons. First, you will be getting the most value for your dollar. Second, you will now have the time to really relax and enjoy the holidays, knowing your preparations are complete.

PFG Private Wealth Management, LLC is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. This material and information are not intended to provide tax or legal advice.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.