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Market Update October 2020—Reflections on the Stock Market, the Election and Future Prospects

Dear Friends and Clients,

Greetings. Well, we have been living in interesting times. The struggle with COVID-19 has had many of us reanalyzing our lives since we have been stuck home more than usual and adapting our living patterns to fighting off a pandemic. Right now, numbers are spiking again for COVID cases here in the States and we have lost 200,000 lives to this virus.  Europe is also seeing spikes and it looks like a second wave is upon us throughout the world. Our First Lady, Melania Trump’s country of origin, Slovenia, and where my Godmother lives, is shutting down all its schools. There is fear in the U.S. that something similar may happen.  So, we need to continue to wash our hands, wear our masks and when possible, stay home.  As the renowned infectious disease doctor, Dr. Anthony Fauci, has explained to us often, we are months if not still a year away from getting full control over this virus. As people have complained to me this past year about how horrible everything is claiming, often, that this is the worse place they have ever seen America in, I have put on my historical hat and listened to them carefully. I have often heard the following:

  • That staying home is killing our economy
  • This election year is horrible and we probably will not have a President for months due to both Parties disputing the results, just like the Florida mess in 2000 with Gore and Bush, only worse.
  • That racial tensions are the worse they have ever seen
  • Our political leaders are sub-standard, on both sides of the isle
  • We are slipping into Socialism
  • That if Trump gets elected or if Biden gets elected, “I am leaving this country.”

Well, let’s analyze some of these phrases/opinions.

A). Our economy, although we had a pullback back in March due to the COVID, has rebounded and is at some of the highest levels it has ever been.  Yes, the entertainment, hotel and restaurant businesses have been hit hard, but home sales and construction are booming and Wall Street, in general, seems to be doing extremely well.  Yes, it will be better for all once a solid vaccine is out there for us and we can get back to “normal” life, but in general, as far as pandemics are concerned, we are doing well with it.  When one looks at the Spanish Flu epidemic of 1918-1919 (see John Barry’s book The Great Influenza for an excellent history of this event), one sees we, as a collective humanity, are doing better than back then (the Spanish Flu killed 50 million people!).  Moreover, when one studies other pandemics, like the Black Death of Medieval Europe (1346-1353 A.D.) that killed at least 70 million or the plague that affected Athens during the Age of Pericles (430 B.C.) where a quarter of the population died (100,000 deaths), we are doing better than most other societies throughout history.  So the march of mankind, so to speak, is going forward although we definitely need to do better.

I just returned from spending time in Germany and Denmark.  Observing how these countries handling the pandemic, the United States needs to do better and we could learn from their examples.  Their infection rates and deaths are much lower than in America.  Saying all this, we in America are adapting and getting back to work.  Also, our teachers are working hard to help our children during these trying times, and we need to support and thank them.   

Even though we are dealing with our new reality, often with difficulty, it seems the market has responded well to our new reality and, with the government stimulus plans, our economy is remaining rather healthy when all things are considered.  We probably have to have a few more infusions of cash again into the economy and help for certain industries, like the airlines, but our government is working hard to do the right thing and has already demonstrated it is helping where it can. Few nations in the world have done and will do what America has been accomplishing to stop the bleeding economically.  As a result, our markets should stay rather healthy although we probably will see some volatility if a change of government happens here in the U.S. and if there is another shutdown.    

B). People are worried about this election year and describe current events as if they were reading everything through the lens of the book of Revelation with the powers of good and evil fighting each other.  In other words, the fate of our country is in the balance and whoever gets into the Oval Office will save our country from ruin.  You hear this from both Republicans and Democrats.  Well, from a market perspective, I like to remind people of the following fact, which as an academic, I must honestly admit, I find surprising.  Historically speaking, the stock market returns 11% under Democratic presidents and 7.8% under Republican presidents looking at the years from 1977 to the present.  So, if you are a business-oriented person, you would want a Democrat in office although it appears that Republicans continue to tout that their Party is more friendly to business.  And when people get hyperbolic about the destruction of our country and that either Biden or Trump will lead us down a road of sociological and economic destruction, I remind people that we have had worse times.  We had the British invading our country and burning down our capital in 1812 when both our political and military leadership were failing us.  At one time, we had a country that ripped itself in two, literally, from 1861 to 1865 during our Civil War.  During this conflict, 618,000 men died killing each other over their visions of what type of government and society they wanted on American soil.  We Americans, in other words, have had it much worse than what people believe today.  The conflict we see politically stands in a long line of conflict that America has often had throughout its history whether it be the Trump/Biden or Reagan/Carter or Lincoln/McClellan or Lincoln/Douglas debates and election battles.  We will survive whatever happens in November and continue to be strong because that was how our democracy was designed—it was designed to have conflict because our Founding Fathers knew that only through conflict, debate and airing opposing views, will a country not turn into a dictatorship or totalitarian monarchy.

Returning to the election, many people wonder what the government will look like if Biden wins.  Some pundits say not only will Biden win, but the Democrats will also dominate in the Congress and Senate.  If that happens, you will see Obama-Care remain in force and the committee for the 25th Amendment probably get passed that Speaker of the House, Nancy Pelosi, has been promoting.  Moreover, many of the tax increases the Democrats want will probably get passed, especially the one on corporations.  If, on the other hand, Trump gets re-elected, there is a strong chance he will not carry the Senate or Congress, and if this happens, he will have difficulty repealing Obama-Care, which he detests, and implementing some of his programs that are not yet finished like building a wall between Mexico and the United States.  In past elections, I had a pretty good feeling from studying the polls of who was going to win, but this year, I have no strong feeling either way.  Last time, I was convinced that Hillary was going to win and we all, with great surprised, saw what happened.  American politics is nothing if it isn’t interesting and, quite often, shocking.   

C). People are up in arms about the racial tensions in the United States.  While I, as a Holocaust and Human Rights historian, do not want to trivialize the need for improvement in our society of making people realize we are part of one race, the human race, I also want to remind people that we have had it far worse than what is going on now.  During the Civil War, we had White people slaughtering each other over ideas about how to organize themselves within a democracy and society.  Brothers, cousins and fellow Americans were slaughtering each other over ideas and geographical affiliations.  Caucasians were slaughtering other Caucasians.  Most Southerners, although benefiting GREATLY from the slave economy, did not own slaves and they were just fighting for their states and home towns (they were not fighting to own slaves).  Likewise, most Northerners did not fight to free the slaves and were just serving because they were drafted and/or because they wanted to help preserve the Union.  History is never Black or White, but a lot of gray.  Although people have died and are dying throughout the United States because of racial tensions, it doesn’t even come close to comparing to the hatred, death and destruction that happened due to nationalistic and sociological convictions we witnessed people have during the Civil War.  So, although we have problems now, let’s not get hyperbolic saying this is the worse we have ever seen it in the United States or that we are incapable of solving the problems.  We won the peace during the Civil War, preserved the Union and abolished slavery.  It was a painful, terrible way of solving some of the nations’ problems of the time, but we as Americans did so and we will solve our current problems and do so together.

D).  When studying our leaders of the past, like Thomas Jefferson, George Washington, Abraham Lincoln, Franklin Delano Roosevelt, John F. Kennedy and Ronald Reagan, just to name a few, I do agree with people on both sides of the isle that Trump and Biden both do not represent the best or the brightest in America currently or compared to some of the great leaders we have had in the past.  Although Americans throughout time have derided their political opponents, the phraseology and terminology used for President Trump and Vice President Biden seem very extreme.  People who hate Trump call him a liar, dictator, sociopath, uneducated, idiot, rapist, misogynist and a racist.  People who hate Biden call him old, decrepit, stupid, demented, frail, unaccomplished, a socialist and uninformed.  Well, America, these are the men we have to choose from.  People who love Trump call him a true American, strong, patriotic, hard-working, tough, business-focused and truthful.  People who love Biden say he is experienced, honest, balanced, respected, kind, presidential and diplomatic.  In the end, both Trump and Biden are Americans and they both are doing their best to serve our country and implement policies they feel will be best for all Americans.  You can argue with their beliefs and visions, but you cannot argue that they are not both dedicated to trying to make the United States, in their own ways, a stronger country.  In the end, we must never forget what French diplomat and philosopher (and close observer of the French Revolution) Joseph de Maistre (1753-1821) wisely said, “Every nation gets the government it deserves (Toute nation a le gouvernement qu’elle mérite).”  Whomever wins the Presidency this fall, America will continue its great experiment of democracy and will continue to be one of the strongest nations of all times. 

E).  The fear that we are slipping into socialism is somewhat verified by some of Bernie Sanders’ policies he would like to see America implement, but when one sees socialism in action like we did with East Germany or the Soviet Union, or like we are seeing with current Communist China or North Korea, we are far from the socialism we should be fearful of and fight against.  Although Communism and Socialism are very different, often people bring them up in the same breath, so I have brought out some world examples to illustrate that we are very far removed from becoming a Communist state that usually arises through violence and maintains itself through fear and oppression.   Now socialism is a different way of governance, and although our government allows for some socialistic programs like Social Security, it is also far away from becoming a Socialistic one.  Some point to the socialism of Sweden or Norway or Germany (like with the SPD) as examples of what some democracies have become that would not foster here a good American way of life. Those people against these types of socialisms say it corrupts the capitalistic drive in people and takes wealth away from those who deserve it—the successful and hardworking people of society (lawyers, doctors, businessmen, etc.).  There might be some truth to this statement, but America is very different from these countries.  In the end, I do not think America is close to falling into a Socialistic way of government and as long as we have a democracy that has two or more parties fighting with each other, Socialistic mandates will not become universal in America.  There might be a lot of policies Sanders and people of his bent might want that can be termed socialistic, but even if he was in power to push through such reforms, he would still need the American government to pass his reforms in order to make them law and legitimate, and that process is very un-socialistic.  However, when one studies Biden and what he did with Obama, he doesn’t seem socialistic in the least and he has disavowed implementing anything that even remotely resembles socialism.

F). Many people have voiced that they are leaving this country if Trump or Biden gets elected.  Although I can understand how these people are feeling, when one truly reflects on American democracy and society, such a response of leaving it if one doesn’t get his or her desired President is neither mature nor a helpful one.  If people are disgusted with the leader of America, whomever he or she be, then it is up to them to try to work for the type of leader we should have in their minds.  If they think we need someone else in the White House because he or she is a better leader, then they need to work towards that goal instead of being sorry losers and quitting the American democracy and going to another country.  And if they leave, what country is better than the United States?  What country doesn’t also have problems with its government and society?  Is there a Utopia out there we can all go to when we don’t get our way with our elections?  In the end, we Americans will get the government we work for and support.

When looking at everything we are currently faced with in America, I like to quote the half-American, English Statesman, Winston Churchill, when he said, “Americans will always do the right thing – after exhausting all the alternatives.”  Even though there are many stresses out there in society right now and people are struggling with where their lives should go, politically, economically and sociologically, we are still living in one of the best times humans have ever seen.  Most of us have plenty of food, our teeth, medical care, a home, a car and a stable government.  There is much to be thankful for and less to complain about.

In looking at our stock market with all these thoughts in mind, it appears that Wall Street likes President Trump and, if he gets re-elected, we should continue to see economic growth continue.  However, Trump is underperforming Obama and Clinton, so if Biden gets elected, we might see stronger returns.  Trump is currently at 38.4% growth during his presidency compared to Obama who was at 71.7% and Clinton who was at 111.1% growth.  Now, Obama and Clinton had two terms, but if Trump’s average is taken into consideration for his first four years, he would be tracking along the level of Obama and underperforming of where President Clinton was.   From the indicators I have been following, like Bloomberg and researchers at Vanguard and Goldman Sachs, if Trump gets re-elected, the market should continue to grow and probably take off once he takes the oath of office.  If Biden gets elected, then the market will probably have a correction and there will be uncertainty for a few months.  However, historically, a presidency by Biden should show stronger returns overall since, as mentioned before, Democratic Presidents, in general, have better performing markets since 1977.

The next twelve months are going to be an interesting time for all of us.  We will see during this coming year an interesting political evolution with whomever gets into office and we will see a vaccine for COVID.  When the vaccine is distributed amongst the population, you better believe that the stock market, most likely, will take off regardless of who is in office.  Also if Biden gets in, there is the thought he will be able to raise the corporate tax level from 15% to 28%.  If this happens, you might see companies once again looking for ways to move their infrastructure offshore to benefit from better tax structures.  Also, many have asked about energy and whether oil and gas are still areas to explore.  Well, I have been touting energy investments for the past ten years, but they have basically flat-lined.  Right now, barrel of oil is around $40 and many analysts say it should be around $70, but they have been saying this for a long time.  Gasoline is not going anywhere anytime soon, but other analysts say that oil companies will continue to suffer this next year as fewer people are driving because of the COVID.  And even when the COVID situation is behind us, we will see fewer people returning to the roads since they will be working from home.  This trend is happening globally and not just here in the United States.  So, the energy market is a strange one to look at and in some respects, it is trading at historical lows, and those lows may be around longer than people’s patience can handle.  And as people ask me where I think good opportunities are then, I tell them I continue to read excellent reports about getting involved with companies that support and that deal with online shopping.  That seems to be the biggest area of growth according to some investors.

In the end, if you have any questions about where you think you should be invested, please feel free to contact me anytime.  We Americans need to feel that our country will continue with a strong military, strong government and strong economy because history tells us so far that this will indeed happen.  Some of these realms may not be where we want them to be, but then it is ultimately up to us to get them to where we want them to be.  As former chancellor of Yeshiva University, Rabbi Norman Lamm, stated, “Small minds blame others.  Big minds blame themselves and then improve themselves.”

Market Update 30 March 2020—Thoughts and Reflections on Current Affairs

By: Bryan Mark Rigg, PhD

As more light is shed on how the coronavirus has spread and how China has handled the crisis, there is mounting evidence that China has handled this pandemic in an irresponsible and criminal way.  It appears that it can only come down to China’s leader Xi Pinjing and his fellow leaders “pathetic” desire not to lose face—do they think we are sooo stupid that their infections are reversing when the whole world’s figures are rising despite the fact that the virus started there and in one of the most densely populated areas of the world!

This arrogant, and childish, approach to the crisis has many in the world in an uproar.  England, and its leader Boris Johnson (who actually has the virus), are “furious” with China and promise to punish China now, and even more so when this coronavirus is behind us.  According to British experts, China’s outbreak is at least 40 times bigger than it currently is reported as being by “this totalitarian, Orwellian” regime1. That means, China most likely has 3,500,000 infections and probably around 150,000 deaths2.

Think about it, if New York City currently has the largest amount of cases in the U.S. due to its population density and airport and seaport traffic making it a cross roads of the world and a natural market for virus spread, then just think of what is really happening in China which has hundreds of New York Cities for cities, all of which have much poorer infrastructure, cleanliness and government care.  I have been to China and I shake my head when I think about what must truly be going on in Shanghai (a seaport city with 29 million people, three times the size of New York City) or Nanking (a major river city with 8.4 million people) just to name two cities out of hundreds that are the size of New York City in China (China is slightly smaller than the U.S. with five times the population of 1.4 billion people).3

In short, China is, by and large, to blame for the coronavirus outbreak with Paul Miller writing in Foreign Policy: “That the Chinese government, beginning in late 2019, lied and directly contributed to the creation of a global pandemic, the deaths of thousands of people, and a global economic collapse, is evidently true, and they deserve blame and accountability for it.”4 One of the first things that England will probably do is to sever its contract with the now proven “dishonest” Chinese telecom company Huawei to “develop the United Kingdom’s 5G network.”5

The only action, it appears, that the Chinese will understand, is if you take money from their pockets.  This potential move by England against Huawei is probably a good thing since the U.S. Justice Department and the FBI have found that Huawei, like many Chines companies, has stolen billions of dollars’ worth of intellectual property and hardware from many major U.S companies—the Chinese government and business community for years have shown how they are; simply put, according to the Financial Times, they are “cheats, bullies and liars”6

The Chinese seem to be practicing the military philosopher Sun-Tzu’s adage that “when you are weak, appear strong” and when your enemy has an advantage, lie, cheat and steal to make sure his advantage becomes a weakness.7 This should not be surprising knowing that the current Chinese government was founded by a mass-murdering, totalitarian, Communist-thug in Mao Tse-Tung who many forget exceeded the likes of Stalin and Hitler, no small accomplishment, in slaughtering at least “70 million during his reign.”8 Mao’s picture still hangs prominently in Red Square and his system of oppression of people and information is still alive and well—in many respects, modern China, one could somewhat argue, resembles what possibly the Third Reich would have looked like today had Hitler won the European war.  In short, China is not our friend and not built upon our ethics and values.  We would be wise to harken to the advice of former U.S. Ambassador to Japan, Joseph C. Grew, when he noted, “To shape our foreign policy on the unsound theory that the other nations are guided and bound by our present standards of international ethics would be to court sure disaster.”9 Although Grew did not know it, he was definitely talking about Communist China of 2020.  I think it is very important that people do the best they can to NOT BUY Chinese goods—Huawei being the biggest one—for China’s behavior ethically business-wise and with the coronavirus cover-up.

Moreover, talk to your representatives and ask what we can do to punish China for its handling of this pandemic.  Now, to be fair, many nations, like Italy, Spain and even the United States, have made many mistakes with this pandemic, and we are, it appears, out of practice of dealing with pandemics since the 1918-1919 Flu epidemic although movies like Outbreak (1995) and Contagion (2011) should have awakened a social awareness that we need to be careful of viruses.  Of course, our Center of Disease Control is doing a wonderful job of fighting this battle every day for years and we need to be proud of the brave Americans there, as well as our nurses and doctors, who are working around the clock to protect us and live by the Hippocratic Oath—they are wonderful and we need to support and praise them.  Before one concludes that I want to demonize all Chinese, on this point, we also need to praise and remember the brave Wuhan Chinese medical professional, Dr. Li Wenliang, who tried to warn the world of this virus back in January, and who has subsequently died of it—China’s government tried to shut him up, and it has been successful shutting up many others like him since then.  We need not forget this brave, heroic doctor when condemning China’s current state of affairs.10

And besides holding China accountable for its horrible behavior, I think we also need to look at some of our own representatives and hold them accountable for taking advantage of the pandemic to personally gain these past few weeks.  As a Certified Financial Planner who is held to the fiduciary standard of not doing anything for others that I would not do for myself or loved ones (a standard our leaders should also live by), I was disgusted to learn about Senator Dianne Feinstein of California (Democrat), Senator Richard Burr of North Carolina (Republican), Senator Kelly Loeffler of Georgia (Republican) and Senator James Inhofe of Oklahoma (Republican) who all sold millions of dollars of stocks before the crash of the market recently acting on allegedly “insider information” they received from privileged, government sources about how bad the coronavirus was going to become—once in possession of this information that they knew would break in a few days or weeks, they quickly liquidated their assets before the market tumbled this month.11 Feinstein, cowardly one might add, said her assets are in a blind trust and her husband makes all the decisions—well Senator, where did your husband get the “insider information” to sell those stocks before the stock market crash?  The answer—probably from you. And concerning the others, the only one who “might” be able to get by with seeing the writing early on the wall was Senator Burr who is an author of the “Pandemic and All-Hazards Preparedness Act,” so he may of really have understood what all the news was somewhat telling us in January.12

However, less than blemish free is Senator Loeffler, and her husband Jeffrey Sprecher, the chairman of the New York Stock Exchange, who sold millions of dollars of their stock the very day on 24 January after she had “sat in on a briefing from two members of Trump’s Coronavirus Task Force.”13 Like with Feinstein’s husband, both Senator Dianne and Senator Kelly behaved like Lady MacBeths and took their husbands and themselves to a place of disrepute and utter disregard for those they supposedly serve—the people.  In contrast, they show they only served themselves. Their hollow defenses sound like Lady Macbeth and some of the discussions they must have had during their “Pillow Talk” with their husbands probably also echoed Lady MacBeth:

Glamis thou art, and Cawdor, and shalt be what thou are promised (these are both names for MacBeth for the area he ruled over and the battle where he won a victory).
Yet, do I fear thy nature; It is to full o’ th’ milk of human kindness
To catch the nearest way; thou wouldst be great,
Art not without ambition, but without the illness should attend it.
What thou wouldst highly that wouldst thou holily; wouldst not play false,
And yet wouldst wrongly win.  Thou’ld’st have, great Glamis,
That which cries “Thus thou must do,” if thou have it, and that which rather thou does fear to do,
Than wishes should be undone.  Hie thee hither, that I may pour my spirits in thine ear
And chastise with the valor the gold round, which fate and metaphysical aid doth seem to have thee crowned withal.14

In short, Lady MacBeth says here: “Do a lot of bad things Hubby, which I will advise you on, and we will have glory and riches!!!!”  However, in encouraging her husband to commit murder and to not think of the people and honest rule, Lady MacBeth would later find out that the “damned spot” of blood and crime would never wash away from her hands or that of her husband’s.  Now Senator Loeffler said she only makes financial decisions after talking to others pushing the responsibility on people besides herself (anyone in the financial world knows that ultimately, the client needs to take responsibility after given information by his or her advisor).  And it is no coincident that “her financial planner” acted immediately after her meeting with Trump advisors on the disease on the 24th of January!!!  In short, Senator Loeffler needs to explain why a fire was lite under her backside to sell her stock right after the meeting with Trump’s task force instead of a fire under her backside to inform people they need to get out of the market themselves and take care of their health.  Also, why didn’t her husband Jeffrey Sprecher, the chairman of the New York Stock Exchange, tell her this was unethical and prevent her from making sales in their account that he would have had to also approve?  Well, the answer is that she convinced him of the wisdom of doing the unethical act. She seems to have first taken care of herself—all too human, but not what we want for an American leader.15 For example, after she and her husband sold $4.3 million of stock, they then “purchased stock in a maker of software that helps people work at home – just before millions of Americans were forced to leave their offices because of the outbreak…”16 Wow, she is pretty clairvoyant and prophetic isn’t she?  No, it appears she acted on information that was not public giving her an advantage over all of us other investors who were not in that meeting on the 24th of January.  Her behavior is, according journalist Nathan Robinson of The Guardian, very “unethical” and she should be punished for it.17

In the end, there are a lot of leaders right now, like China’s Xi Jinping, and Americans Senators of Dianne Feinstein and Kelly Loeffler, who the world, it appears, would be much better off not having.  Xi Jinping has, it appears, murdered thousands of his own people and many of other nations’ with utter disregard for dealing with the information given him by his medical and scientific community. His crimes against humanity are much graver than anything Feinstein and Loeffler have done, but they all show disregard for others in the face of what we really need from them; namely, tough, heroic action that puts the needs of the people they serve before their own needs of self-preservation and economic gain.

In the end, I encourage all of you to first take care of your health.  Stay away from others right now until we get a handle on things. Morgues are overflowing with bodies in New York and China’s crematoriums, you better believe, are working around the clock.  Saying this, the vast majority of us who get the virus will conquer it and heal. According to Dr. Anthony Fauci (who appears to be a real hero through this mess and a fighter for humanity), as the head of Trump’s Response team to the Coronavirus, says that he is “very confident that those who recover from the coronavirus are really protected from reinfection.”18 He has been fighting viruses for decades honing his skills early on being one of the best fighters against the AIDS epidemic in the 1980s and 1990s. 19

With men and women like Fauci, which American has thousands of brave and smart doctors working the problem, it truly appears we will overcome this tragedy regardless of how many obstacles China has created for mankind with this disease.  We will overcome. We most likely still are in for many more weeks of bad news, but once we find a modus operandi for how to deal with the virus and get back to work, I think there will be an explosion of economic activity (just like we saw in 1920 and 1921 after the Spanish Flu epidemic which killed 50 million)20. America survived  the Spanish Flu epidemic and entered the Golden Age of the 1920’s (“Roaring 1920s”) and I think something like that awaits us in a few months, maybe a little over a year, but it is coming.  One sees such behavior from mankind after major events like these that knock us down—we always, as humans, get back up. That is why we are here because we have a long lineage of ancestors who refused to give up—some of their survival was genetic, but a lot of it was due to their strength of characters and strong wills.  And unlike the major crash of October 1929, we now have FIDC insurance for our bank accounts, Securities and Exchange regulations, Medicare, Medicaid, Unemployment Support and a TWO trillion dollar stimulus package signed in by President Trump just to name a few safety nets. Our grandparents and great-grandparents did not have such support in 1929 and they found a way to survive and we will too. Let’s look to the past for strength and the present with the information we have to work the problem, take care of ourselves and loved ones and, not only hope for a better future, but also do all we can to make it better.  As far as investments are concerned, the market is down roughly 30%. We are probably in for more rocky waters, but investing now is more attractive than it was two months ago if you were buying into the market, and in the long run, according to Warren Buffett, if you buy on the dips, you will be rewarded more in the future. Of course, depending on your age and risk appetite, certain investments might be more attractive than others, so please call me to discuss if you want to. And of course, if you have any questions, please feel free to contact me anytime.

Sincerely,

Bryan Mark Rigg, PhD

1Adam Payne, “Boris Johnson’s Government is Reportedly Furious with China and Believes it Could Have 40 Times more Coronavirus Cases Than it Claims,” Business Insider, 20 March 2020; https://www.businessinsider.com/coronavirus-boris-johnsons-government-reportedly-furious-with-china-2020-3
2https://www.worldometers.info/coronavirus/
3World BankUnited States Census Bureau, China population, accessed 29 March 2020.
4Paul D. Miller, “Yes, Blame China for the Virus: A Bungled Response in Western Countries is No Reason to Take the Heat Off China.  IF China Had a Different Government, the World Could Have Been Spared this Terrible Pandemic,” Foreign Policy, 25 March 2020; https://foreignpolicy.com/2020/03/25/blame-china-and-xi-jinping-for-coronavirus-pandemic/
5Adam Payne, “Boris Johnson’s Government is Reportedly Furious with China and Believes it Could Have 40 Times more Coronavirus Cases Than it Claims,” Business Insider, 20 March 2020; https://www.businessinsider.com/coronavirus-boris-johnsons-government-reportedly-furious-with-china-2020-3
6Kiran Stacy, “US Accuses Huawei of Stealing Technology From Six Companies,” Financial Times, 13 February 2020; https://www.ft.com/content/3174481a-4e8b-11ea-95a0-43d18ec715f5
7Ian W. Toll, The Conquering Tide: War in the Pacific Islands, 1942-1944, NY, 2015, 5. I have paraphrased the second part of Sun-Tzu’s quote in my sentence above.  The original quote I am basing my information on reads: “War is the Tao of deception. Therefore, when planning an attack, feign inactivity.  When near, appear as if you are far away. When far away, create the illusion that you are near. If the enemy is efficient, prepare for him. If he is strong, evade him.  If he is angry, agitate him. If he is arrogant, behave timidly so as to encourage his arrogance. If he is rested, cause him to exert himself. Advance when he does not expect you.  Attack him when he is unprepared.”
8Jung Chang and Jon Halliday, Mao: The Unknown Story, London, 2006, 3.
9Leonard Mosley Hirohito: Emperor of Japan, NJ, 1966, 154.
10Stephanie Hegarty, “The Chinese Doctor Who Tried to Warn Others About Coronavirus,” BBC, 6 February 2020; https://www.bbc.com/news/world-asia-china-51364382
11Dom Calicchio, “Dianne Feinstein, 3 Senate Colleagues Sold Off Stocks Before Coronavirus Crash: Reports,” Fox News, 20 March 2020; https://www.foxnews.com/politics/dianne-feinstein-3-senate-colleagues-sold-off-stocks-before-coronavirus-crash-reports
12Ibid.
13Ibid. See also Lachlan Markay, William Bredderman and Sam Brodey, “Senator Kelly Loeffler Dumped Millions in Stock After Coronavirus Briefing,” The Daily Beast, 20 March 2020; https://www.thedailybeast.com/sen-kelly-loeffler-dumped-millions-in-stock-after-coronavirus-briefing?ref=home
14Shakespeare, MacBeth, Act I, Scene 5.
15Lachlan Markay, William Bredderman and Sam Brodey, “Senator Kelly Loeffler Dumped Millions in Stock After Coronavirus Briefing,” The Daily Beast, 20 March 2020; https://www.thedailybeast.com/sen-kelly-loeffler-dumped-millions-in-stock-after-coronavirus-briefing?ref=home
16Dom Calicchio, “Dianne Feinstein, 3 Senate Colleagues Sold Off Stocks Before Coronavirus Crash: Reports,” Fox News, 20 March 2020; https://www.foxnews.com/politics/dianne-feinstein-3-senate-colleagues-sold-off-stocks-before-coronavirus-crash-reports
17Nathan Robinson, ÚS Senators Accused of Coronavirus Insider Trading are a Symbol of Moral Bankruptcy, The Guardian, 21 March 2020; https://www.theguardian.com/commentisfree/2020/mar/21/us-senators-accused-coronavirus-insider-trading-are-a-symbol-moral-bankruptcy
18Ayln Woodward and Holly Secon, “Fauci Said He’s ‘Willing to Bet Anything’ That People Who Recover From the New Coronavirus are ‘Really Protected From Reinfection’”, Business Insider, 28 March 2020; https://www.businessinsider.com/coronavirus-fauci-those-who-recover-will-be-immune-2020-3
19Ibid.
20John M. Barry, The Great Influenza: The Story of the Deadliest Pandemic in History, NY, 2004, 452.

COVID 19 Update & Its Effect on Markets

Update: 12 March 2020
By: Bryan Mark Rigg, PhD

There is an old adage that the stock market goes up on an escalator and goes down on an elevator.  On February 12, 2020, the Dow Jones Industrial Average closed at 29,551 in record high territory.  One month later, the Dow traded at 21,347, a drop of over 27% into bear market territory.  An index drop of 10% is termed a “correction” and a drop of 20% is called a “bear market”. What a difference a global pandemic of the Covid-19 Coronavirus and a price war over oil between Saudi Arabia and Russia make!  Even a Trump presidential pep talk from the oval office, his blocking travel from Europe of non-Americans, and massive Fed liquidity intervention have failed to reverse the direction of the market.  Travel, hospitality and petroleum sectors of the market have been particularly hard hit including cruise ship companies.  On March 12, 2020, the Dow had its worst day since the 1987 crash.  The S&P 500 and the NASDAQ also fell into a bear market.  On the other hand, some stocks from other sectors have held up relatively well like cleaning companies and online service centers.  But these companies are a minority. Most major companies have pulled back on their prices.

This time of uncertainty in the markets, reminds some of what happened during the Spanish Flu epidemic from 1918-1919 which killed many young and otherwise healthy people.  While overshadowed by World War I, over 50 million people died in this tragedy.  After tremendous destruction, 11 million war deaths and many more injuries from four years of a World War, the broken-down infrastructure was incapable of dealing with the outbreak.   Many leaders, at first, wanted to keep it quiet for fear it would create a panic and hurt morale in society.  Philadelphia went ahead with its parade and rally to sell war bonds and thousands died. Not facing up to the disease facilitated its spread.  Medicine and science have come a long way since then and the Coronavirus is a very different illness.  In contrast to the Spanish Flu, it appears that Covid-19 is more of a threat to the elderly, especially those over 60 with underlying health problems.  The World Health Organization’s (WHO) early estimate is that Covid-19 has a mortality rate of about 3.4%.  It is already so widespread that the WHO classified it as a pandemic and no vaccination is expected until next year.  This is the first pandemic caused by a coronavirus and the WHO has never seen a pandemic which can be controlled.  Each day brings news of cancelled or indefinitely postponed events:  South by Southwest in Austin, the NBA and NHL seasons, March Madness college basketball tournaments, political rallies, and business meetings.  The whole country of Italy is on quarantine as is a town in New York.  Many colleges and universities have cancelled classes and moved to online education for this spring.  Companies have told their people to avoid travel.  Millions of children are already home as schools close and more closings are expected.  No doubt, the steps taken and which will be taken to fight the Coronavirus will be disruptive to the economy, increasing the likelihood of recession.

While China was not as transparent and open about Covid-19 as we wished, they have improved since the SARS outbreak a few years ago.  And when they got serious, they used their authoritarian tools to shut down and quarantine an area of over 31 million people, retarding the spread and giving the rest of the world more time to prepare.

Now what does all this mean for the markets?  Well, we now have the correction that most experts, including myself, felt was long overdue. Depending on which start date you use in the United States, an average bull market last between 2-3.6 years.  Our markets continue to grow since our founding, but it is a jagged hyperbolic curve pointing always in the direction of growth.  Most people, however, have a hard time internalizing this reality.  If anything, some people should maybe be rebalancing their holdings and once a bottom is reached, some should possibly look carefully for opportunities to invest in growth stocks at a much better price than a short time ago—it all comes down to your suitability and risk tolerance.  If many felt it was very safe to invest money at the highs a month ago, which was just before the crash, then it could be argued that many of those same investments are discounted now and are more attractive.  Indeed, some feel it might be very risky now to invest even though prices are much better.  In the end, it all comes down to the belief and conviction that there is a reasonable prospect for recovery which I feel will indeed happen.  In the past, recovery time usually is 18 months before a correction/bear market returns to previous highs—let us hope this happens again (although, as always, past performance never guarantees future results).  In other words, our market will most likely get back to 28,000-29,000 sooner than what people are currently thinking on average—this is the hope at least. If this happens, it probably will take a few years, but in investing time, a few years is not very long at all although for some people, it might feel like an eternity.

Besides the virus causing problems with our markets, Russia appears to be trying to damage or bankrupt American companies in the shale oil production, allowing Russia to raise prices.   That play may go on for a while. There will likely be some bankruptcies and consolidation.

In the end, the world will adjust to the coronavirus and the bust in our oil industry will end.  America will survive this and our markets will recover.  We always do.  Many people are indeed frustrated with our current political climate, but one must remember two famous phrases of our half-American Allied leader, Winston Churchill, when he said, “American Democracy is the worse form of government except for all the rest” and “America usually does the right thing after exhausting all other options.”  We will get through this time and be better for it—at least that is the American Spirit and historical trend I have studied throughout my life.  Currently, I am reading Paul Johnson’s A History of the American People and we have so much to be thankful for when looking at what type of government our forefathers have created for us and we have so much to look forward to with the type of leaders, albeit imperfect, that our country continues to produce.

Sources:
Sources–Yahoo Finance, 12 March 2020
Yahoo Finance, 13 March 2020
Johnson, “History of American People.”

Bryan Answers Your Questions

November 11, 2017 – Wealth Strategy with Bryan Rigg, Your Wealth Professor
Listen In Every Week: Saturday on WRR from 7:00-8:00 am

Wealth Strategy with Bryan Rigg

KLIF’s Wealth Strategy with Bryan Rigg

We are here every Saturday morning during the seven o’clock hour. We like to talk finance. Normally we come in here every weekend, and we like to discuss four or five topics that fill the hour. We’re going to do something a little different this morning, and we hope you stick around for it.

We’ve compiled a list of over 50 questions that we’ve gotten by email and by voicemail, and we had a workshop recently that we had many people show up from WRR, listeners, anyway. We had some questions come up in that.

These are kind of simple questions. I know as people listen, you can’t talk to the radio. I mean you can, but we can’t hear you.

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Annuities, CD’s, IRAs & 401K

October 28, 2017 – Wealth Strategy with Bryan Rigg, Your Wealth Professor
Listen In Every Week: Saturday on WRR from 7:00-8:00 am

We’re going to talk today about four different things. We’re going to lead off with annuities. When we talk to new clients, and we talk to people who listen to the show, the feedback is everyone’s heard about annuities, and everyone’s heard about CDs. It’s because it’s what banks do. It’s safe. It’s a reasonable return, and there are expectations that could be met. We’re going to get into what they are, and why they may not be what you think they are.

Then we’re going to get into Rigg Wealth Management.  Their business here in North Dallas isn’t for veterans, but they have a lot of experience being veterans. We’re going to talk about what their special insights are for veterans if there’s any out there that are listening. Then we’ll get into definitions and differences with IRAs and 401(k)s. Most people do this more than anything else as far as a do‑it‑yourself kind of investment option. We’re going to get into the do’s and don’ts.

We’re going to close out the show with client stories. We’re going to have Bryan talk about some of the successes he’s had with some of his clients of late and in the past few years that are relevant. In case any of you are looking at coming on board, we wanted to remind you that you’re not the only one that’s jumping from one investment firm to another. Bryan, as an independent consultant, he gets a lot of new clients that come over from somebody else, and some first-timers, as well.

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What is Your Appetite for Risk?

October 21, 2017 – Wealth Strategy with Bryan Rigg, Your Wealth Professor
Listen In Every Week: Saturday on WRR from 7:00-8:00 am

We are going to talk about four different things today. Each one of them is going to be about 15 minutes, so we’ll take up a little bit of time on each topic. First, we’re going to get into sectors of the market and investing within sectors. It helps you pick a sector within the market that gives you a little more general insight. We’re going to get into that as well.

The psychology of investing is important. We’re going to cover that, and identifying and helping measure your risk appetite. We haven’t talked about that in a few months. You have to understand going in what your appetite for risk is, and Bryan’s seen many examples and many clients for that. The third segment, we’re going to come back after the bottom of the hour, and we’re going to talk about cybersecurity. Bryan had an interesting meeting recently and has some insight on that.

We’re going to close out the show with trust funds ‑‑ who are they for, and why we have them. It’s not something that’s on most people’s portfolios, but if you want to work with money for the people and leaving a legacy with parameters, trust funds are a great way to go.

It doesn’t always have the connotation that people are trust fund babies. That’s not the case. That’s some of the worst cases. There are good and bad purposes for trust funds, but a lot of people, when you hear about the diversity that’s offered in trust funds, it can be a great asset to a portfolio.

We’re going to start off with when we look at investing in the market, we look at trying to decide what to get into. So many people think it’s just a stock ‑‑ pick a stock and buy that stock. Luckily, the market allows us to invest in sectors. Bryan, help people understand sectors in the market.

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Municipal Bonds

October 14, 2017 – Wealth Strategy with Bryan Rigg, Your Wealth Professor
Listen In Every Week: Saturday on WRR from 7:00-8:00 am

 We are here every Saturday morning at the same time to talk about finance, financial wealth, and understanding and managing your portfolio, whether you do it yourself, or you happen to be a fan of Rigg Wealth Management or anybody else out there.

We want to help you understand that there’s proactive stances and actions you can take to make yourself better prepared for your future. Sometimes it’s not all about you. It’s your family, your loved ones, and your legacy. Either way, whether you’re saving for the future, or you’re saving for today, doing something is absolutely necessary.

Today, we’re going to focus on a topic, and we’re going to burn a couple segments the first half hour. We’re going to talk about municipal bonds. We’ve got an opportunity that Rigg Wealth Management has come up with.

Though we’re here to talk about the language and verbiage of understanding finances, financial management, savings, and sometimes investments ‑‑ portfolios, stocks, bonds, and all those things, today we’re going to get subject specific.

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Politics and It’s Impact on Investment Strategies

October 7, 2017 – Wealth Strategy with Bryan Rigg, Your Wealth Professor
Listen In Every Week: Saturday on WRR from 7:00-8:00 am

The topics we’re talking about today that I’m going to ask these two gentlemen to chime in on, the first quarter hour is going to be politics and examples of why politics and government are so impactful on our investment strategies, not just here, but internationally, as well.

We’ll tap in on “Should We Retire if We’re able to Retire?” Is it a good idea to actually retire when it’s time? Are there other options and opportunities that we can look at, part‑time work or hobbies, philanthropy efforts. When it’s time to retire, what exactly does that mean?

Getting a little bit deeper at the bottom of the hour, we’ll come back with “What are ETFs?” Exchange traded funds. We’ll close out the show with cyber-security and the risks with our accounts, online and such.

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Financial Do’s and Don’ts

September 30, 2017 – Wealth Strategy with Bryan Rigg, Your Wealth Professor
Listen In Every Week: Saturday on WRR from 7:00-8:00 am

I want to cover a couple of things that we’re going to talk about today. Our segments are going to be the stock market being up and down, how much do we need to pay attention. Some horror stories, some dos and don’ts. Our third segment’s going to be, “How much money do I need to retire?” We’re going to end up with teaching our kids and families about finance. It’s something that if we start at an early age it’s easier to do. It’s less complicated.

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Healthcare Costs and Retirement

September 23 , 2017 – Wealth Strategy with Bryan Rigg, Your Wealth Professor
Listen In Every Week: Saturday on WRR from 7:00-8:00 am

Now, that fall is here we wanted to bring everybody back in for one big roundtable discussion. Again, welcome WRR listeners. We are here again to talk about financial strategies and financial management. Our show is different.

There’s a lot of other financial shows on the airwaves here in Dallas‑Fort Worth, but we really don’t do the hard sell. We don’t do the hard pitch. We’re not here to pitch fear or pitch prosperity. The fact is that we like to get here and talk about what you can do to change your future financially. A lot of it you can do yourself, and a lot of it you’ll need some help with.

We’re here every week to talk about the terms and the vocabulary and to break things down to keep it nice and simple for you so you can learn what you can do. It’s foreign to all of us. It’s kind of scary and intimidating. The fear of the unknown is significant no matter what it is. It just happens to be the financial talk.

We’ve got Gary, David, and Bryan here this morning all to try and make your life a little bit easier. We’ve got topics we’re going to talk about today. Basically, we talk in four 15‑minute segments. The first one we’re going to talk about is the rising cost of healthcare not just every day but especially after retirement.

The second segment we’re going to be discussing planning for the IRS and tax penalties, not just in financial planning and pulling your money out but investing as well. There are costs and IRS elements and tax penalties for investing in the profits and losses you make.

Also, we’ve got some of the biggest mistakes in saving for retirement. We’ve got some interesting horror stories. We’ll call them horror stories, but anecdotes from actual experiences with clients.

Then we’re going to close out the segment with something a little bit more divested into the management of wealth management structure, and that’s margining accounts, which I think is very helpful. Some people will find that interesting as well.

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