Financial Focus: The New Normal — The Coronavirus Investment Fund

My job as a financial advisor today is most interesting. The questions are abound? ” What should I do about the stock market”? Why is my 401k down? How can I get my account to go up?

If I could (we did) we would throw away all the past logic! Today, starts the new “normal”.

What is the new investing “normal?” For one, understanding that we live in a new economy — a stay-at-home/work economy — which we knew at one time as self employment or entrepreneurship , which will now be 15-20% of our economy. Some people will prefer to work from home and some employers, looking to save money, will have some people, work from home. Sadly, because this won’t encompass everyone who lost a job, our economy will take some time to get back to the “old normal.”

The CARES ACT, a $2 trillion stimulus package was passed by Congress to provide direct payments of up to $1,200 for Americans impacted by the COVID-19 pandemic.

So just like our economy will be new, so will the financial markets. Today, if you haven’t noticed, yes the stock market has been recently going up, but the leaders today are not manufacturing based- they are ” virtual” based.

Today, for example, work is still going on and meetings are taking place- but not in the boardroom but on the ZOOM room. This videoconferencing tool , which has been around for years has, in just weeks, boomed with popularity. And other companies are doing well in this area

Today, while working at home with our smartphone, this secnerio may not work the best for many people , trying to capture effeciency. So they will downgrade- to a normal computer, to maximize the effeciences of our new work tools. Yes, MICROSOFT and APPLE, will be part of our new normal

Another example, with entertainment. In our ” old” normal you might have taken your friend or family ” to the movies” where you would have spent money on entertainment and FOOD. Today we just click on NETFLIX, and go to the refrigerator and wholla, we have the new virtual normal. Or maybe we just go to our ” APPLE or GOOGLE play store to download our favorite GAMES

Keeping up with healthcare, look what happened to the stock of GILD sciences in the last 2 weeks. Up! Up! Up!.

Or maybe still bordering on entertainment, you prefer to hang out , with friends or in a group?. Just click on FACEBOOK and you can interact in seconds.

Still prefer your phone?. I don’t blame you. But what makes all these apps work in the first place?. A good operating system. And in the smartphone world, it is ALL covered by GOOGLE and APPLE.

Looking at our ” old economy” since Jan 1st, it has been a disaster economically and in regard to the financial markets, it really has been no different: Real Estate, -25%, Energy -38%, Large Cap companies down 8%, and the traditional manufacturing based 500Index is at a – 8.7%

In the last 2 weeks, I ordered my staff to analyze what tools make up ” the new normal”. And I saw a new world:

Firstly while the old manufacturing based 500 index was down, the virtual 500 NASDAQ was up, 1.9%.Telecommunications was up 3%, Healthcare up 3.4%, and Technology was up 4.9%.

Maybe on a side note, more surprising was ” Bonds”. While always a favorite in our client portfolio, average rates were still at a positive 4.7%, since Jan 1st.

So what did we do? Really, the first three steps of financial planning: writing down your goals and analyzing options- and now to execute those options.

So we have created ” The Coronavirus Investment Fund”.

We have created 3 sectors to trade in our world: What we call ” technology stocks”, “New World No technology” and ” The New Regular” sectors, that we believe ” on the surface can beat the ” old market” but we also believe , with an occasional tweaking, can outperform even more.

How much can you invest? Whatever you want? Where can you investment? You can’t? It’s not ” officially real”, but very real to us

Jason and Sheila, my assistants, are going to assist me with this process and our results will be online, via a daily dairy. And while of course, as we will be watching our fake mutual fund go up and or down, we will be watching very close for ” movements ” that will notify us, and our REAL clients mutual holdings for possible readjustments, for REAL returns!.

But can you create your own? Of course! ( But get professional help). And if you decide not to, go see a financial professional to get your long term planning back in order. As you saw above, the traditional markets are taking a beating , though no fault of anyone ( but a virus ) but if you don’t ” readjust now” it will be your fault.

And if you want to use the thoughts of our ” Coronavirus” mutual fund as your guide?. Feel free to read our diary, it is on our FACEBOOK professional page below.

What we will tell you now is this. Our office , as some might know, authored a ” mathmatical article” on Coronavirus”on April 7th and it’s endings. We have been mostly very accurate on all of its findings, from peak to through, and what we believe will be considered a ” safe zone” to go back to normal . We believe it will be June 15th at it’s earliest. And of course, we are looking at 90 days after, to slowly work out way back in.

So, we are looking till September, where our ” new normal” will take us to our traditional promised normal land again. We believe the economy will start to slowly take our way of this recession but we will see another 4 months of manufacturing destruction.

So whether you create your own fund or go see your financial professional for a check-up: do something!

Bank interest rates, if you have not heard , might, might, go into negative territory. The fact that were so close to being there now, is very dangerous.

So , in remembering one of my key ways to financial health, by increasing your net worth, you might want to look at discussing looking at investing in our ” upcoming new normal” or a financial check up.

Yes by 2021, our economy will traditionally roar! For the next 8 months , however , we expect a ” new change”

You can find our ” Coronavirus” daily diary in our Facebook page, I Want My Tax Money.

Professor Anthony Rivieccio, MBA PFA, is the founder and CEO of The Financial Advisors Group, celebrating its 24th year as a fee-only financial planning firm specializing in solving one’s financial problems. Mr.  Rivieccio is an Adjunct Professor of Business, Finance & Accounting at the City University of New York and Monroe College. You can reach Anthony at 347.575.5045.

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