Broker Check

Have we recovered?

August 01, 2020

With all the discussion about what a recovery looks like; a V (quick down then quick up), a U (quick down and stays down for a while) or a square root sign (down, up and flat), I put a few observations on paper.

  1. The S&P 500 on January 1, 2020 closed at 3259 and as I write this (7/29) we are working around 3247. The low was March 22 closing at 2237. By this measure, you can call this a recovery.
  2. Unemployment – 2020 started in the realm of 4% and approached 15% as the pandemic hit with full force. As of June 2020 it had decreased to 11.1%. We may see further decreases as Congress changes the unemployment payout and there is further demand for employees.
  3. Paying back the government spending - Who is going to pay-off the 2-3 trillion-dollar credit card?
    1. If we get back to 4% unemployment and the economy is rolling along, that will help reduce the debt.
    2. In the long run there will need to be tax adjustments.
  4. Commercial Real Estate –If a business owner has half of his office space unused because the staff is working from home AND liking it, what will they do when the lease comes due?
  5. Residential Real Estate - If everyone is ‘fleeing the urban centers for a variety of reasons and employees can work from home, what does housing look like in 2022 going forward? An office becomes more important than a third or fourth bedroom. In addition, you can live further away with less expensive houses.

Lots to think about as you look at your investments. In many ways, recovery is a personal standard and something we can each work on.

What is going on at Harvest Financial, the team is changing.

  1. Matt is off to Michigan to pursue a new career and Jimena Escudero has joined us to help with some of his duties. Jimena resides in San Diego, (speaking of working from home). Jimena attended Bowdoin College in Maine, where she graduated with her Bachelor’s degree in Philosophy. Jimena is a detail-oriented self-starter, and proficient in all First Allied systems. Outside of work, Jimena enjoys staying active and traveling, she has run the Athens marathon, studied yoga in India, and has summited Mt. Kilimanjaro. Great person to talk with.
  2. Paula joined us from Mechanics/ Rabobank. She has caught on quick to most of our systems and will be contacting you for review appointments.

Finally yet importantly, I wanted to remind you of the network I have developed over the 30 years of living in Napa. It would make sense that a financial advisor would know tax advisors, bookkeepers and estate planning attorneys - and I do, in all shapes and sizes. I also know a flooring person, interior design, clothing stylist, realtors and general contractors. If you have a project and are wondering whom can help, give a call and I’ll spin the rolodex. If you are scratching your head over the word rolodex, it just shows you how fast things change in this technology world and we adapt. My reason to be optimistic about the future. Stay Optimistic!