Transcript

Hello, I am Ken Moraif, Senior Retirement Planner and Founder of Retirement Planners of America, and I am in a hotel room this time in Orlando, Florida. I am actually attending a TD Ameritrade National Conference, so I am here to learn all kinds of stuff that we can use to benefit our clients and you. And so, this is our weekly market alert video for the week ending January 31, and wow, January’s over already. It’s crazy how fast time flies when you are having fun, isn’t it?

So once again, as we have been talking about over the last couple of weeks, the coronavirus is definitely front and center when it comes to all of the talk about the behavior in the markets. And the Center for Disease Control actually, for the first time in 50 years, announced a quarantine of Americans, and called this an unprecedented health crisis, so obviously that is something that needs to be taken seriously. Airlines are stopping travel to China, and so all of that is creating a whole lot of uncertainty — and when it comes to the markets — the stock markets, the S&P, the Dow — primarily, what people are concerned about is profits because profits usually are what drive the prices of stocks. And so, if China, which is a third of the world’s consumption of commodities — they are a driver of growth around the world — and so, if their economy tanks even more than it has under the tariffs from Donald Trump because of this, then that certainly would bode badly for the growth prospects for the global economy, for the countries that depend on China, and, therefore, that doesn’t look good for stocks.

Now, if you listen to my podcast on this topic, I go into some detail regarding what happened in previous outbreaks around the world like SARS, the Ebola virus, the Asian flu, the avian flu. So, there were lots of things that have happened over the last 40 years. Now, what happened — and a year later in almost every one of those cases, all except for one actually — the S&P, the stock market, was up a year later and even 6 months later. So, if this is like the others — big scare lots of angst about what could happen — eventually the health services get it under control, and we now look back and say, “You know, the markets were down, but they recovered quickly.” So, assuming that that happens in this instance as well, which we believe it will, this down is most likely a buying opportunity.

Now, having said that it doesn’t mean that what happened in the past is going to happen this time too, because it’s also possible that this does turn into a pandemic, it does get out of control. And if that happens, then it could be a terrible thing, and it could cause a global recession if people don’t go outside, they don’t travel, they don’t go in public places, then that will dampen the economy in our country, as well. And it could, you know, escalate into a recession and a bear market. Now, we don’t see any of that, so for the time being, our fearless forecast of Dow 31,000 is still intact, despite the coronavirus issues that we are seeing now and the scares that they are creating. So, our new season is going relatively well. It’s kind of choppy up and down. Some companies are doing well, and others are doing less than that, but overall profits are still solid. Employment in this country still looks pretty good. The economy looks relatively strong.

The other issue that’s in the news, of course, is the impeachment of Donald Trump, the trial rather in the Senate, and we see that as being — the Republicans are most likely going to vote to acquit. And so, this will be fodder for the election campaigns. But from the standpoint from our investments and the markets, we believe this whole impeachment process is going to be a nonevent when it comes to the final outcome of it. So, we will watch it — obviously if there is something that needs to be done in that regard, we will — but we don’t see that as being something that’s going to move the markets particularly.

So overall, even though this coronavirus is a scary thing and potentially could become a great human tragedy — it already is a tragedy — but it could develop into a pandemic. And if that were to happen, of course, we might be getting to our sell signal. And if that’s the case, then we will get out and protect against further downside, but we don’t see that happening, as I said. We still have our fearless forecast of Dow 31,000 — and by the way, we did say there would be a correction of 10% given how fast the market had risen over the last 3 or 4 months, so this may be it. Certainly, we didn’t see it coming in this form, or because of this reason, but nevertheless, it may be that this is what’s happening, so we’ll keep you posted.

One thing that I would encourage you to do, if you are not a client, is to go to our website, RPOA.com. We are retirement planning specialists, and so we look at buy, hold and protect as our investment philosophy. So, it’s not just buying quality investments, and diversifying and holding them, and doing all of that to manage it during that process. It’s also having a strategy to say, “You know what? I’m going to get out of harm’s way, and I’m going to go and protect what I’ve got and wait out the storm.” And of course, our strategy said to sell in November of 2007, and so we counseled our clients to be out of equities for all of 2008, and actually until June of 2009, before our buy signal came. So it’s something we believe that, if you are retired or retiring soon – it’s an important part of your financial planning, and we would like to help you with that, as well as social security decisions, income decisions and all the decisions that are necessary to have a successful retirement.

So, RPOA.com is our website. Thank you for watching this video, and we will talk again soon.