Hello. I’m Ken Moraif, senior retirement planner and founder of Retirement Planners of America, and if you’ve been following these videos, you know that we counseled our clients to get out of equities early last week, and at this point, you may be wondering: is it too late for you to do the same; what should you do; where is this going to go; and all those kind of questions, so I wanted to address those in my opinion. I’m not your financial advisor. I’m not giving you advice. You do as you wish. Talk to your professional before you do anything, but here’s my take.
This situation has the potential to really get out of hand. The longer it goes, the more the hardship is going to be on businesses, but in my view, more importantly on countries. If countries go into recession — Italy for example; their economy is shut down. Fifteen percent of their economy is from tourism, and right now, there is no tourism. So, how long can businesses stay open with no business coming in the door? If their economy goes down badly enough, if there’s not a solution to this coronavirus in short order, then we could start seeing banks in Italy go under. And they have (Italy does) a large amount of debt as a country, and if they are unable to make their debt service as a country, then we could see a domino effect.
Now, there are other countries that are less financially sound as bad as Italy is, in South America and in other places, and so our concern is what we’ve been talking about for 2 or 3 years now, and that is the global debt. People are looking at the stock market and the 2,000-point drops, and that’s causing all kinds of attention-getting and headline-grabbing, but for us, the bigger problem is potentially, another credit crisis like what happened in 2008. And if you look at the great depression, that was a credit crisis-driven recession — 2008, was a credit crisis-driven recession. When people go bankrupt, when there’s no money, when people are not willing to lend anybody money to stay in business, that is when you have the worst kinds of recessions in our research; and so, this potentially could unwind and get out of hand.
So, we’re getting questions from people, “Is it too late to sell?”, and our opinion is no, it is not. What we do is, as you guys know, we look at a number we call your magic number. That is the amount of money that you need to support your lifestyle during your retirement or to retire on, okay, if you’re not retired yet. And if you are okay right now, and we’d have to visit with you to be able to tell you if you have enough right now — if you have that, it is our opinion that you should sell and protect that. Okay? Live to fight another day. Worrying about, “Oh my gosh, it could turn around tomorrow and go up from here and I’ll miss out,” we believe is not the way that someone who is within 5 years of retirement or 5 years into retirement, that 10-year period, should be thinking. Worrying about what you’re going to miss out on, in our view, is less important than protecting what you have, and so, therefore, that’s our opinion.
Now again, talk to your financial advisor. Make your decisions. You’re not a client of ours, and therefore, I cannot give you advice. I’m just giving you my opinion here. And in 2008 when we said to be out of the markets, we had the same question. When the market was down 15-20% we had many people asking us you know, “Is it too late to get out?” We were telling them the exact same thing that I just told you, and that is, in our opinion, it is not. It is not too late. You need to protect what you have in our opinion — or you should consider protecting what you have in our opinion — because it could get a lot worse, and if it does, and it takes years to recover, then what are you going to do, okay? There’s an old expression that says that the market can remain irrational a lot longer than you can remain solvent; so, there are a lot of people I’ve heard say that this whole coronavirus thing is overblown, and everybody is panicking, and it’s not as big of a deal. Well, it doesn’t matter whether it is or not. The fact is that your retirement, your ability to retire, or your ability to stay retired is at risk right now. So, whether the market is behaving rationally or whether this is all real or not, it doesn’t matter. In our opinion, it is time to take safety actions.
Now, if you don’t know what to do; if you don’t know how to do it; if you want to talk to one of our people and get a second opinion at the very least, I’d recommend that you go to our website — it’s RPOA.com — and click on “Meet with an Advisor,” and what you will do there is you’ll visit with one of our retirement planners, and we’ll give you a full-fledged plan on what to do with all of this. We’ll help you to see if you have enough money to retire on, and that you need to protect, and we’ll do it at no charge or obligation. If you don’t want to be a client, that’s fine. Just at least, we want to help as many people to have a secure retirement as we can. If you are client or not is secondary. We believe in helping as many people as possible, and we’ll be taken care of in the process. Okay? So, I encourage you to visit with one of our retirement planners as soon as possible, and you can do that by going online — RPOA.com. Okay?
So, I’m not trying to scare everybody. You know, as a planner, my job is to plan for the worst and hope for the best, and with our clients, they’re retired or retiring soon, we can’t have the worst happen to them because we are sitting around hoping for the best. We just can’t, and that’s the way we roll, okay?
So again, thank you for watching this video. There will be more, I’m sure. This thing is evolving very quickly, and so I appreciate you watching this and share it with as many people as you’d like. We want as many people to see this as possible. Thank you.