“Sell in May and go away” is a famous saying in the investment world. It hasn’t been that accurate in recent years, but we believe this year it may come true. We believe the market is experiencing a “Fear of missing out” (FOMO) move. We say this because, as we saw last week, there is very little good news to support a recovery, yet the market recovered 33% of its March 23rd low. We are one month in what will likely be the greatest quarterly loss of GDP in our history, so why is the market happy? The Fed is throwing every kitchen sink it can find at this market, which is temporary good news, but it doesn’t have a vaccine or timeline for when the market will fully recover. We remain cautious in our investing and will look for another
quick drop in the market before we get another level of stability.
This week, the interest rate on a 30-year fixed, no point loan is 3.25%. We believe this interest rate will fall further in the coming weeks as the housing high season comes to a close. Furthermore, we see longer-term treasuries falling further, given the continued high volatility in the stock and bond markets. Therefore, if your current mortgage rate is 4% or higher, we want to review if refinancing your mortgage to a new 30-year fixed is right for you. One question to consider is whether you plan to stay in your home for another 5 years, 10 years, or as long as possible. If you don’t expect to be there another 10 years, I would alternatively consider a 10/1 adjustable rate loan if the interest rate is far less than the 30-year fixed rate. If you are considering leaving in 5 years or less, I suggest you skip this recommendation altogether as the cost would be too high and you would be paying mostly interest in this period.
I’m sure you’ve heard the horror stories of patients being treated in hospitals for COVID-19 without the ability to advocate for themselves and/or without family permitted to be physically present. While this understandably is a scary prospect, you can be prepared for these situations by having an updated Advance Directive, which names someone to help make healthcare decisions for you should you be unable to do so yourself. You can find the details and the form here: https://www.aarp.org/caregiving/financial-legal/free-printable-advance-directives/
In addition to other deadline changes, such as the submission of your Census form and tax filing, Primary Voting deadlines in some states have been postponed. In Maryland, the Primary elections will be held on June 2, 2020. The website https://elections.maryland.gov/voting states that, “the majority of voting will be conducted by mail. An absentee ballot will be mailed to all registered and eligible voters. You must be registered with the Democratic or Republican parties to vote for President and most other contests.” The website offers additional information on alternatives for voting, including how to obtain absentee ballots, return of ballots, as well as in-person early and June 2nd voting. Information for the 2020 General Election is also provided. For information on other states’ absentee voting, please visit https://www.vote.org/absentee-ballot
Research has long supported the idea that gratitude exercises can have tangible benefits, such as reduced anxiety and stress, better sleep, and greater focus on what really matters to you. Given the stressors brought on by everyday life, now exaggerated by the global pandemic, now is a great time to start finding your silver linings. Set aside a few minutes each day to acknowledge some things in your life for which you are grateful. You can set a time, be it morning or night, but try to keep it consistent in order to turn this into a habit. If you prefer to keep your thoughts private, you can start a gratitude journal where you simply jot down your acknowledgements for the day and have something tangible to look back on – especially whenever those really challenging days pop up. Sometimes the practice of acknowledging what you’re grateful for out loud is grounding enough – in this case, grab a loved one and share some space (virtually works here!) where you both can reflect on your daily gratitude. Practicing your gratitude can go a long way to calm the storm of today’s circumstances!
As always, we are here as a resource for those that you care about and for. If you are worried that your family and/or friends may have been given improper financial guidance or are losing their hard-earned assets, we are available for a free second opinion or guidance to make sure they stay financially safe.
Be well and have a wonderful week!