Announcer:
It’s time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only, and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker dealer. Member FINRA, SIPC, investment advisor representative, Cambridge Investment Research Advisors Incorporated. A registered investment advisor, Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now, here’s today’s Financial Focus program.
Nate Kreinbrink:
Good morning and welcome to this week’s Financial Focus brought to you each and every Wednesday morning right here on KROS. This is Nate joined this morning by John. It’s been a while, John, since you’ve been on the show, you’ve been keeping the Davenport office under control down there, huh?
John Nelson:
Trying to, yeah. Good to be back on the show today.
Nate Kreinbrink:
Yeah, I know we’ve got as we’ve kind of transitioned a couple of times before, big plans coming along for down there in Davenport area with the building of the new office. We hope to get going this year, so exciting times. Expanding it and really getting that underway I think will be exciting from your standpoint down there.
John Nelson:
Yeah, making some headway finally. It’s been a… the time we get started it’ll be almost two years in the works, securing the property and now working on building plans to help replicate what we have here in Clinton with accountants, estate planning attorneys all in house. Be really nice once we start the project, hopefully two to three months from now we’re breaking ground and getting things moving going into 2020.
Nate Kreinbrink:
It’s hard to believe we’re already into the last show of February already and then hopefully as we were walking up here this morning, still a little brisk out there and we both kind of commented how we can’t wait until spring time coming in here. This time of year obviously is known for sicknesses, for colds. You hear stories all the time as far as in the schools, Influenza A, Influenza B, just people getting knocked down from sickness.
Nate Kreinbrink:
This year it’s been a little bit on a bigger landscape as far as from national headlines with the Coronavirus and you’ve probably all read all the stories as far as this has been in the news since early December, kind of mid-December there when the first case was diagnosed. But what technically is coming into play here is it really hit the market hard the last two days and that has a lot to do with as far as how this virus is going to spreading it into different countries. I think that’s where that panic comes into it. And again, people need to know that this is not something that has happened or it hasn’t happened before. We’ve had these different outbreaks before and in the market has always rebounded.
John Nelson:
Yeah, it’ll be interesting seeing the numbers, how things have been affected. Obviously, don’t want to minimize the last two days in the market over 3% both days, but still looking at things from the standpoint of we’re still only 10% off all time highs. So that kind of helps put things in perspective a little bit in terms of where we are in the market cycle, Coronavirus obviously, new concerning, spreading rapidly. I think we’re going to see some things get maybe a fair amount worse than they are right now before things get better.
John Nelson:
But tough to say, you look at companies like Disney, they’re shutting down a theme parks in China, that’s been the case for awhile. They’re talking about potentially here in the US. There’s going to be certain sectors that are hit a lot harder than others and then just the whole supply chain for a lot of companies overall the economy’s going to be affected by this. We’ll see how long it lasts. It’s tough. We’re still fairly early in things and how they’re developing right now, but something we’re obviously keeping a close eye on and the markets will be too.
Nate Kreinbrink:
Right. And I think the markets react just because of it’s a stark reminder as far as how we have such a global economy anymore in today’s times. As far as travel, as far as retail, as far as imports, exports, knowing that people continually to get infected by this virus overseas, that’s going to shut down production. And so how are companies that are depending on those companies to get products to ship products, how are they going to be able to function and where they’re going to go. So again, the retail standpoint from it will be affected as far as if people just don’t want to travel anymore.
Nate Kreinbrink:
Cruise ships, hotels, things have already been or have seen that impact or people just staying, “I want to stay home. I don’t want to even take the chance as far as going in to do that.” It was the news that came out yesterday as far as the Olympic committee debating on whether or not there would even have the Olympics in Tokyo this summer, which they said they’re going to have to decide that by May because June, July Olympics. That’s big time and you can see the scope where this is starting to affect and the precautions that people are starting to take. And again, like you said, I think it’s going to get a little bit worse before we’re able to get better with that.
John Nelson:
Yeah, and I know President Trump has said a number of things, hopeful that things get under control here quickly. I think everybody’s obviously hoping for that. The markets clearly are trying to give some confidence in the markets I think more than anything, but it’s only a matter of time until we see things likely spread here in the US and then hopefully can be under control enough to a point where this doesn’t spread into a much bigger issue than it already has become so far. So markets, Nate and I looked just briefly before coming on, positive, at least this morning, things could obviously change. But again, we’re still 9%, 10% just off of all time highs. We’re still not in a terrible position by any means, but watching this and watching how the market, more importantly reacts to it, will be our game going forward.
Nate Kreinbrink:
Right. And I think this brings into account that obviously people looking at their investment accounts and seeing how does this affecting me, and obviously, as we’ve mentioned with the markets kind of downturn the last two days. Obviously, there is some effect when you look at it from just that short-term environment, but when you look at it, and we’ve always said as far as patience, said patience with the building down in the Quad Cities, your accounts and your investments come along with that too as far as patience and looking at this from a long-term perspective. This isn’t the last time or the first time that we’ve had outbreaks and epidemics like this that have came into it with SARS back in ’03, the swine flu in ’09, cholera in 2010. You can go on and on and on throughout history and just see some of these other outbreaks, but it’s understanding, okay, what have they done after that?
Nate Kreinbrink:
Then yes, there has been a big downtick, but if you look at it, again not saying that this is what is going to happen, but again, historically you look at some of these things after the SARS outbreak, the six month change after it and the S&P, it was up almost 15%. With the swine flu back in 2009, six months after that it was up a little over 18%. So again, what does that say? It’s saying that there are going to be downturns in the market like we’ve experienced. How the market responds will be the big question?
Nate Kreinbrink:
And again, historically those numbers said that happened after the six months, the only difference is were in a different time period right now. We’ve had this extended bull market that we’ve had. We’ve been hovering it all time highs. We’ve had interest rates down near lows. So again, there’s a different game that we’re playing then when some of these came out. So that’s where I think some of the worry has started to set in a little bit. But again, it’s understanding where we’re at and how you want to be positioned and to be able to handle this.
John Nelson:
Yeah, I think Warren Buffett said it really well yesterday. When he views an investment and we use the same discipline, and again it’s not easy for clients looking at statements month-to-month or even online day-to-day, but when he’s looking at companies, he’s making determinations on do I like this business over the next five, 10, 15, 20 years? And to be buying or selling based on headlines is not in his vocabulary. It’s not really in ours either. We’re obviously very cognizant of these movements because they can be impactful, but the week-to-week and even month-to-month moves, people are dependent on money to live on through retirement.
John Nelson:
There’s no doubt about that, but trying to take a lot of the emotion and not panicking, making crazy decisions at the wrong time, but really viewing things in a longer term view. And just because the markets sold off 3% or 6% in a two day period of time, Warren Buffet’s point was, I still like that business. I still like it long-term. That’s why I own it. If I didn’t like it, I wouldn’t have bought it in the first place. So just the market volatility day-to-day or week-to-week is not changing incredibly in terms of our views on positioning clients’ assets going forward. And our analysts do a very good job of blocking out a lot of these type of movements and just looking at the signals to determine where we want to be.
Nate Kreinbrink:
Right. And I think it’s important also to know that this is your investment part of your overall retirement plan is just that it’s just a part. It needs to be taken into consideration with everything else and knowing that, okay, yes, my investments, okay, they maybe have gotten hit a little bit over the past two days, but again, moving forward, where are we going to be with that? As John said, as far as the allocations with it, but understanding some of the other pieces that go into it as far as your tax planning, things along those lines.
Nate Kreinbrink:
To again, make yourself in a better position and just understand that, as John said, it comes down to fear and it comes down to emotion. Don’t be too greedy during times when things are good. Don’t be too fearful when times are bad, but again, taking those emotions out of it, don’t overreact and again, having a plan, working with somebody that does have a plan will help that ride go much smoother.
John Nelson:
Absolutely.
Nate Kreinbrink:
So again, I did want to mention that before we run out of time that every Friday, NelsonCorp Wealth Management is wearing jeans for charity. Money raised in the month of February will be donated to the Mississippi River Eco Tourism Center. John, appreciate you joining me this morning.
John Nelson:
Yeah, happy to be here Nate.
Nate Kreinbrink:
Again, this is Nate and John with NelsonCorp Wealth Management bringing you this week’s Financial Focus. Thanks for tuning in and have a great rest of your week.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker dealer. Member FINRA, SIPC, investment advisor representative, Cambridge Investment Research Advisors Incorporated. A registered investment advisor, Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.