In difficult economic times, Americans tend to get tremendously innovative. New companies and new products historically have been what has led us out of times like these.

Here are the 5 ways that entrepreneurs and innovators have taken advantage of the downtime created by this crisis and ones of the past:

 The founders are more willing to try new things during times like these

 Companies find it easier to recruit top talent

 They have a tighter focus on cash flow and products

 It is easier getting ideas heard and implemented

 Entrepreneurs and innovators run their companies with a stronger sense of purpose

There is an old expression that says entrepreneurs and innovators should never waste a crisis and, honestly, there is a lot of truth in that. If you own a business, make sure you are being innovative and using this time to your advantage.

 

Ashley Page, JD, MBA

Senior Vice President

Wealth Consultant

Email Ashley Page here

 

Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Economic forecasts set forth in this presentation may not develop as predicted.

No strategy can ensure success or protect against a loss.

Stock investing involves risk including potential loss of principal.

Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.

The post 5 Advantages Innovators Have in a Crisis appeared first on Fi Plan Partners.

The post 5 Advantages Innovators Have in a Crisis appeared first on Fi Plan Partners.

 

Spike in Volatility

We saw a spike in volatility last week, starting on Thursday, because of the rising tensions between the US and China. It’s no secret that the tensions have been building in recent weeks as the Chinese government really continues to take heat for the virus. Last week we saw other escalations as China started trying to initiate a new national law in Hong Kong in an effort to basically take away its autonomy. That was met with US senators introducing a bipartisan bill that would sanction Chinese officials who try to enforce that new law. Also, the Senate passed legislation that would basically ban certain Chinese companies from listing on the US stock exchange. The rising tensions are a big deal and is something we’re watching carefully. It’s important to know that the US and China trade deal getting done last October was one of the main reasons we saw the market go up last year and was the big reason the markets and the economy had so much momentum coming in to this year before the virus. Right now is clearly not a good time for animosities as both countries are hurting economically. We expect a big tug of war in the market between the positives of the economy trying to open back up and the negatives being caused by the volatility and rising tensions between the US and China.

Bankruptcy

Last week we focused on potential bankruptcies within the retail space and with other US companies. Clearly there’s tension between bondholders and investors along with companies trying to get through this crisis. What came out this week, that we think was interesting, is that countries also can default. This crisis is not just impacting companies’ earnings, it’s impacting countries’ revenue from a tax standpoint. Argentina is going through its ninth default. We don’t think Argentina will be the last country to find themselves in this position. You’re hearing about cities, states in the US, and European countries that are struggling. There’s a lot of stress outside of just retail, such as in restaurants and others. In the US there’s a lot of tension between the investing public and managers of money, companies, and countries that just can’t pay their bills right now. As this crisis goes on for longer and longer, the bills are going to have to be paid and the only way to get through that is through default and bankruptcy. That’s something that’s going to start to grow and expand as a risk to markets. In addition to that, we’re seeing tension out of DC on the next stimulus bill. Estimates were for $3 trillion in this bill and one of the sticking points is that the two sides greatly disagree on whether or not federal funding should go to states to allow for mail-in ballots. In 2016, around 1% of all mail-in ballots were rejected due to clerical errors. Either they weren’t signed correctly, the back of the ballot wasn’t filled out or the wrong person was circled. There’s clearly more room for error on those mail-in ballots. If an expansion of mail-in ballots happens, we could see up to one and a half million votes just not counted due to errors like the ones mentioned. That’s not necessarily far and there’s a lot of contention around that. A $3 trillion savings bill could be held up just because of something so small.

Making Progress

We are still seeing tension from still dealing with a pandemic and the impact on the economy. Data came out recently with a little bit of good news, in which we are in need of. When the pandemic started and the first reports from that came out at the end of March, it wasn’t good. April was a really tough time as well but if you look at the United States, Japan, and the Eurozone, four of the largest economies of the world, the rate of decline in May was less than the previous months. That was both on the service side and the manufacturing side. The analogy among us that we always u[...]

With the increase in technology and the time we are all spending in environments that are more virtual than normal, it’s important to educate yourself on cyber security.

Watch this educational vlog to hear Adam Vansant of Fi Plan Partners give tips on how to protect yourself and your business from malicious cyber activity.

 

Adam Vansant, AIF®

Associate Vice President

Wealth Consultant

Email Adam Vansant here

 

Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Economic forecasts set forth in this presentation may not develop as predicted.

No strategy can ensure success or protect against a loss.

Stock investing involves risk including potential loss of principal.

Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.

The post Cyber Security appeared first on Fi Plan Partners.

The post Cyber Security appeared first on Fi Plan Partners.

Looking Forward

Can the market hold these current levels or possibly go higher even though we’re seeing negative jobs numbers week after week? That is a question we continue to get, and the answer is yes. In fact, history says the strongest returns were followed by the worst payroll reports. One historical example that we have analyzed is from 2008-2009. The worst payroll report during that cycle was in March 2009, which was released in early April that year and by that time the market was already up 25% off the lows. After that came seven months of job losses following that. December of 1974 payroll was at it’s worst for the 1973-74 cycle. The Market was already at 15% off the lows and then four months of job losses followed. So, looking at all of the historical data, the answer is yes, the market can hold these levels and possibly go higher even though the payroll numbers continuously coming back worse week after week. Caution is needed but the market is historically forward-looking.

The Consumer

As we’ve said before, the consumer makes up 70% of the economy. One thing that we have been watching is the lag in consumer confidence. When you look at the recently reported retail sale numbers for April, they came in at 16.4% which was lower than expected. For the second-quarter GDP, we’re seeing estimates of anywhere from a 25% to 42% drop. When we look at that GDP number, the consumer is playing a huge role in that. We’re seeing companies start to reopen across the country, some are publicly traded companies. We’re also seeing large retailers filing bankruptcy. One important question is, how’s the consumer going to react to the openings and the bankruptcies? It’s kind of a catch 22 where they’re getting pulled in two different ways. Will they go out and make purchases or will they show concern from the closings. This is something to watch over the upcoming weeks.

Reality

Last week we pointed out that we were watching to see what the employment data said on Thursday to see if it would be an important tipping point and to see if it started to improve. We now have had two layers of PPP to come out to keep people employed and we have started to see jobs reopening, however, the Thursday employment data came in worse than expected. That was somewhat concerning to all of the programs in the reopening phase because we’re not seeing people go back to work. Of the 20 million people that lost their jobs in April, 17 million expected to get their jobs back. With three large retailers filing bankruptcy, it’s really hard to see how their jobs are going to come back when there’s no company there to rehire. That’s something we’re watching very closely this week because consumer confidence may start to fall a little bit if we continue to see jobs not coming back. A key point to watch is the auto industry because, this week, they are going to attempt to reopen some of the manufacturing plants. Why is the auto industry so important? The auto industry creates 6% of economic output in this country. We should see auto workers going back to work which will hopefully create a drop in this Thursday’s unemployment claims. We really need to start seeing some of these numbers improve before we can expect that the low is here, especially from a job standpoint. As stated before, off of the worst jobs report of a recessionary period, the market does go higher. The trouble is that we don’t know when the worst jobs number is or will be until after the fact. Was April the worst job number of this recession or will it be May? God forbid, will it be June? We don’t want to be too pessimistic, but that’s why we are trying to focus on the weekly data because everything is changing so quickly.

Better Than Expected

Bankrate is a research group that does surveys on the American consumer. One survey that they did last week was asking Americans where they currently are financi[...]

 

Jay McGowan, Director of Financial Planning at Fi Plan Partners, took the time to go over a few things that we have learned from the COVID-19 pandemic from a financial planning perspective.

Watch this video to learn why it is important to build a cash emergency fund and how much of that should be liquid cash and how much should be in investments.

 

Jay McGowan, CFP®, CPA, PFS

Senior Vice President

Director of Financial Planning

Email Jay McGowan Here

Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Economic forecasts set forth in this presentation may not develop as predicted.

No strategy can ensure success or protect against a loss.

Stock investing involves risk including potential loss of principal.

Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.

The post #459 The Importance of Being Prepared appeared first on Fi Plan Partners.

The post #459 The Importance of Being Prepared appeared first on Fi Plan Partners.

Rough Unemployment Numbers

On Friday, the DLS reported that a little over 20 million Americans lost their jobs month over month for the month of April. That is the worst job loss on records which pushed unemployment rates north of 14%. What was interesting is, part of that 20 million, roughly 17 million, believe that they will be rehired. What is important about that number is that the VLS number for the month is backward-looking and it’s delayed by a few weeks. Each Thursday we get the unemployment data that shows the number of new claims filing for unemployment. That’s more of an accurate assessment of where things stand. Of those 17 million people who believe they will be rehired, if they are truly being rehired as we start the reopening process, we should see that on the unemployment claims on Thursdays and those numbers should start to drop. We’ve tens of hundreds of billions of dollars on PPP to give businesses funding to rehire employees and two layers of that have been put into place. We are now opening state economies so, this week’s job information is extremely pivotal because it should reflect the positive moves that have been made. If we see that number stays stubbornly high, that that’s probably a bad indicator that these 17 million people believe they’re going to be rehired and are not. There are certain businesses that will just never come back and with that, you will have people believe that there’ll be rehired, but the company isn’t there anymore. This Thursday’s number will be possibly the most important to watch and how the market reacts to it. This will have a huge impact on people’s portfolios that are invested in the equity markets and fixed income markets across the board. Is this reopening going smoothly? How is it working? Are people actually being rehired? These are things to watch. We’ve also seen consumer sentiment expectations stay higher which may be reflected in the fact that most people think they will be rehired. If people believe they’re just temporary off out of work, the sentiment really shouldn’t drop as much. If those people start to realize that they are not going to be rehired, you could see a wave of negative sentiment in this country.

Economic Success

We will start following the success of the economic data and the economy reopening very closely here. The good news is that the states with declining Coronavirus cases now make up 72% of U.S. GDP. We are watching a couple of things. Will states reopen without a second wave? Over the weekend, South Korea started reopening and saw a spike in their cases. Also, previously mentioned, will the furloughed workers be rehired now that the economy is coming back? An interesting fact to watch here is that 94% of Americans live in a state that’s going to be reopened by the end of the month. The success of the market will greatly depend on the success of the reopening. As these economic reports start coming out, we’ll be analyzing these very carefully and make sure to keep you informed because all of these things will have a big impact on the market.

The Main Street Lending Program

We have talked a lot about the Payroll Protection Program, but we wanted to talk about a program that you may not have heard as much about since PPP has been the focus in the media. The Main Street Lending Program has $600 billion in funding from the Federal Reserve. This program is aimed at employment. What’s great about that for your portfolio is that more public companies can participate in it. The protection program on the second round worked a lot more efficiently so the federal reserve has come in with yet another approach. At first, we added the Payroll Protection Program and it was really the only main stimulus. Now we have two. We still have the PPP and on top of that, the Fed has added this Main Street Program with the fed.

Corporate Guidance

With all the data and the[...]

 

This vlog covers the top 10 ways for business owners to be innovative and use technology to their benefit during this current and changing time.

Tune in to watch Felicia Ludlum, Adam Vansant, and Brian Collins of Atomic Pictures, dive into the details and give insight on how to focus on the future of your business.

 

Felicia Ludlum

Business Development Coordinator 

Email Felicia Ludlum here

Adam Vansant, AIF®

Associate Vice President

Wealth Consultant

Email Adam Vansant here

 

Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Economic forecasts set forth in this presentation may not develop as predicted.

No strategy can ensure success or protect against a loss.

Stock investing involves risk including potential loss of principal.

Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.

The post Technology & Innovation for Business Owners appeared first on Fi Plan Partners.

The post Technology & Innovation for Business Owners appeared first on Fi Plan Partners.

 

Uncertainty

With the uncertainty around the Coronavirus, it is almost comforting to see the markets trading down over something that we are a little bit familiar with. The news broke that there are escalating tensions between the U.S. administration and the Chinese administration about trade and supply chain. It’s negative to the market and would be considered a “dancing bear” but one we’ve seen before and one we can kind of calculate. Companies and corporate America have somewhat prepared for the rising tension with China and the U.S. The tension seemed to have dissipated with everyone focusing on the singular enemy of the Coronavirus but is coming back to surface once again. It’s almost a little bit comforting that we see the market trading down on over something that’s a familiar. We can better deal with the unfamiliar “unknowns” that have been stirring the market up and down every day by what seems like historic proportions. A big battle will start up between the bears and the bulls as the economy opens. As to which direction this market will go, there are many indicating factors that will give insight to that. If optimism gets back into play, the stock market usually will always move forward before the actual economy picks up. When you see the market kind of rollover like it has the last couple of days, it’s almost saying, hold on, not so fast. Then we see things like escalating tensions with the two largest global economies and that may be an indication as to the market saying that we’re not out of the woods yet.

A Positive Outlook

We wouldn’t be surprised to see the market have to grind through the month of May as the states start to reopen and as we start to deal with negative economic news around earnings and other economic pains. One of the most common questions that we received in April was about how the market is slightly up even with negative economic news. There are a few things to consider when pondering that. One thing that we mentioned before is that the market reacts before the economy. With that being said, maybe with the market being up, it is possibly saying that the worst is behind us. Another reason it could be up, despite negative news, is that the Federal Reserve has taken unprecedented steps to put liquidity in the system and they’ve done so in record time. Also, even though we’re seeing high unemployment, we’re still seeing employees contribute to their 401(k), which creates a buy into the market. These types of situations are why we have a diversified strategy in your portfolio. Nobody knows for sure when the bottom to this market is going to occur but what we do know is that there are valuations out there that we’re watching closely. If the market should trade down, there may be great buying opportunities. We could also look up and see a drug treatment that gives people the confidence to get back out into the economy. This whole scenario will be studied for many, many years from an economic history standpoint.

Economic Indicators

We look at future indicators a lot but let’s take a look at “backward” indicators. The GDP for the first quarter came in at a negative number of 4.8%. The GDP in the Eurozone was down 14.4% which is three times as much as the U.S. The GDP shows the economic health of a nation. Looking at Europe we wonder if their GDP number is a future indicator of what we might see in the next coming month for the U.S. We might see the bears start to come out of the woods more so often than not. When we’ve had these downturns, new innovation has presented itself and a lot of new business models have come about. Europe does not have some of the innovation, technology, and research that we have here in the United States so everybody will be watching closely to see if that is an indicator of things to come. It could be that the U.S. will continue to move forward and recover quicker than Europe will, b[...]

 

Ashley Page and Jay McGowan of Fi Plan Partners partnered with Contangy, Brooks, Smith & Prophete, LLP to do a webinar regarding employment laws, small business loans, and the CARES Act. If you own a business or have been affected by COVID-19, this information is for you.

Webinar agenda:

1. Tom Scroggins and Brooke Nixon: Emergency Paid Sick Leave and Expanded FMLA Leave

Leave Triggers

Pay Caps

Tax Credits

Documentation

Exemptions

Unemployment Benefits

OSHA Recording of COVID Cases

Avoiding the Flood of Litigation Employment

FLSA Compliance – teleworking and timekeeping

Hazard Pay

Providing PPE

2. Ashley Page: Paycheck Protection Program Loans

3. Jay McGowan: CARES Act Changes

Watch the video to learn how this information could be helpful to you! 

 

Ashley Page, JD, MBA

Senior Vice President

Wealth Consultant

Email Ashley Page here

 

Jay McGowan, CFP®, CPA, PFS

Senior Vice President

Director of Financial Planning

Email Jay McGowan Here

 

Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Economic forecasts set forth in this presentation may not develop as predicted.

No strategy can ensure success or protect against a loss.

Stock investing involves risk including potential loss of principal.

Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.

The post Staying Afloat in the Pandemic Flood – Webinar appeared first on Fi Plan Partners.

The post Staying Afloat in the Pandemic Flood – Webinar appeared first on Fi Plan Partners.

Stimulus

Today, the second round of stimulus money, which is $310 billion, is set to be available. In our prior blogs, we have talked about the $350 billion and the fact that it was exhausted about 13 days. This round will probably be like that, if not faster. The good news this that this program overall is going to save between 50 and 60 million private company jobs in the United States which is half of the private company employment in the United States. A lot of people have asked how the U.S. plans to pay for this stimulus since this time last year we had a deficit that was $1 trillion. All the recent funding has taken us to $3.7 trillion, to give you historical reference. That is pretty much where it was right at the end of World War II. The great thing about it, in the bull category, is that because our interest rate in long-term funding has dropped, our service cost as a nation on the $3.7 trillion, interestingly, is actually less than the prior $1 trillion that we had. If there’s any time to be adding stimulus into our economy in this way, it’s right now because the interest rates are so low.

The Fed Meeting

People are wondering how the market is currently up with the horrible economic numbers that we are seeing. One of the reasons the market is up is because of the Fed. They have taken significant action in the past few weeks. They cut rates to zero and have rolled out a series of emergency funding and allowed lending facilities to keep credit flowing. One thing we will be watching is on Tuesday and Wednesday of this week, the Federal Reserve has its quarterly meeting. We are waiting for Wednesday to see what Fed Chairman Powell will have to say during his news conference. While we don’t expect certain action to be taken by the Fed this week, what Chairman Powell says could be a market mover. Are we going to see a V-shaped recovery or a U-shaped recovery and how bad is the economy? The bank of Japan and European central banks are all meeting this week as well. We have noticed that central banks around the world are taking steps to keep the global economy up and running.

First Quarter GDP

One of the things we have heard over and over through our research and through media is that time will tell. We think time will start to tell with this upcoming first-quarter GDP number. This is the first report after the virus kind of started in the month of March. With this GDP number, we should see a little bit of context about what’s to come on the next quarterly reports. The GDP is just a snapshot or an estimate of the overall economic health. It can seem a little backward-looking. This GDP will report on the growth rate for the first quarter of our economy. The more important thing is to see if this is an indicator of how the second half of the year is going to be. Of course, the second quarter is going to reflect on what we are currently going through, and we might even see a jump in the third quarter. The hope is that the third quarter could possibly be the turnaround we’re looking for when everybody gets back to their jobs, back to work, and the economy starts to open up fully again.

Analyzing the Data

The first quarter GDP clip we’ll get this week is backward-looking like explained previously, but it does include the beginning of the economic shutdown. In addition to that, this week will be showing 1/3rd of the S&P 500 companies reporting earnings for the first quarter. We will take a look at how the data deteriorated in the month of March as the shutdown began and extrapolate that into how much that may impact the second quarter if we push forward. Another thing we’re looking at is the difference in overall GDP slowdown versus Corporate America and the large-cap companies that are reporting their slow down. The S&P 500 are large-cap companies and typically don’t include the mom and pop stores down the street. GDP encapsulates the large consumer, the total economy. The [...]