On September 11, 2001 I got a call from wife telling me to turn on the TV because a plane had just hit one of the Twin Towers in New York City. We lived in a small basement apartment on the outskirts of Salt Lake City and I was getting ready to go to work. I walked into our tiny living room, turned on the TV, not fully comprehending what my wife had said, and within a few moments I saw another plane hit the second tower and my heart ached for the loss of life and for the first time in my life, I felt someone was trying to kill me. I was now late to work, but I didn’t care. I was riveted to the screen as word came in that another plane had just hit the Pentagon. I then had the distinct impression, “I am not doing any good by sitting here on this couch.” I stood up, opened my front door and walked outside to my car and looked up, because I wasn’t sure if a plane was going to come out of the sky and possibly hit my quiet street in Salt Lake or not. My life, like most others who experienced that event were forever changed that day. It wasn’t a rational thought, but I truly felt, for a split second, there was a chance I could get hit by a plane. I walked out my front door this morning with a similar feeling, almost as if there was a chance the Coronavirus was hanging outside my front door waiting to infect us all. I don’t think I am alone in that thought, whether it be rational or not.
The fact is, stepping out our front door on any day carries with it an element of risk. We help prepare for those risks by taking certain actions. If it is raining, we may bring an umbrella. If it is sunny, we may bring a hat. We know there is a chance if we get in our car and drive 60 miles an hour, we may get in an accident, so we wear a seat belt. We know there are inherent risks with everything we do, but we continue to do them because we feel the reward outweighs the risk.
For over 10 years we have been listening to people talk about how this is going to be the year of the next recession. There is going to come a time when one of them is right. Perhaps it is this year, perhaps not. But just like me putting my seatbelt on each morning when I get in the car, we have been putting seatbelts on each of your portfolios and financial plans from the moment you walked in our doors. Each of you have an element safety in your portfolios designed to withstand even the worst market downturns.
Those of you in retirement have a significantly greater amount of these safety nets in place to get us through this downturn. Just 3 months ago, many of our conversations with you were about, “things are going so well, should we add a little more stock to the portfolio?” Our response to you was, “Has your plan time horizon changed? Has a fundamental life event occurred in your life that warrants a different amount of risk?” If the answer to either of these questions was no, then we recommended you stick your current strategy. Not because we were fortune tellers, but because it was what was appropriate for your stage of life. Right now, this is the opposite end of the spectrum, but our counsel is no different. Stick with your plan. If you are needing this money to live on, keep living. There are reserves in place we can pull from that are not coming from stocks. If you are still accumulating wealth, continue your monthly contributions to your 401ks and savings. You are buying when things are roughly 20% lower than they were a month ago!
I know this is an emotional time for all of us. We are humans and emotions come with the territory. One of the greatest balms I know of to sooth a stressful time in our life, is to talk about what is ailing you. Please know we are not going anywhere and if you need to talk, we are here for you. Even if you have confidence in your plan, but still just want to hear our voice and talk to someone who is going through the same experience with you, we are here for you. We care about each of you and we are doing what we know is best for the long-term health of your financial plan. Just give us a call if you need a virtual hug. (No real hugs right now, that’s dangerous. 😉)
In an effort to keep clients and friends in the loop Cambridge is getting social, media that is. You’ll notice the various social links below, please like or follow us on whichever channel you prefer. Our goal is to provide you with timely information whether it is via our blog or social channels. We’ll try our best to keep you updated as best that we can.
© 2020, CAMBRIDGE CAPITAL MANAGEMENT, LLC. ALL RIGHTS RESERVED. THESE MATERIALS WERE DEVELOPED FOR INFORMATIONAL PURPOSES ONLY AND DO NOT TAKE INTO ACCOUNT YOUR INDIVIDUAL NEEDS, FINANCIAL OR OTHERWISE, AND SHOULD NOT BE RELIED UPON BY YOU WHEN MAKING ANY PARTICULAR FINANCIAL RELATED DECISIONS. THE INFORMATION HEREIN WAS DERIVED FROM SOURCES DEEMED TO BE RELIABLE BUT HAVE NOT BEEN INDEPENDENTLY VERIFIED, AND NO REPRESENTATIONS OR WARRANTIES ARE MADE WITH RESPECT THERETO. SOME INFORMATION IN THIS ARTICLE COULD HAVE BEEN DERIVED FROM BROADRIDGE INVESTOR COMMUNCATION SOLUTIONS, INC VIA OUR PAID SUBSCRIPTION FOR THEIR SERVICES. ANY INFORMATION FROM BROADRIDGE IS SPECIFIC PROPERTY OF BROADRIDGE.