This is our video for the week ending April 24, 2020. And, wow, April is almost over already. This year just started! Time flies when you’re having fun, I guess. Anyway, another week with, of course, the coronavirus in the headlines dominating what’s going on.

Oil prices, of course. Who knew that the most precious commodity in the world just 10 years ago would be free today, or that there would be a moment when somebody would actually pay you to have it? Incredible. This is an example of what we were talking about when we think that there are going to be unforeseen consequences to this stopping of the economy, and we don’t know what’s going to happen. Therefore, the second shoe we believe has not fallen yet, and so the answer to the question that we have been asking ourselves, which is, “when do we go back in?” What if our strategy tells us it’s time to get in next week, and we still don’t have answers to all the questions that we have? Do we go back in? And, right now, the answer is that we are very concerned about going back in without having clarity. And, of course, the question then becomes well what does “clarity” mean? How will you know when you have clarity? And the answer we’ve come up with is that we have no idea when we will have clarity, but we’ll know it when we have it. We just know that we don’t have it now. Let me go through with you the litany of items on the list that contribute to our lack of clarity.

Okay. So, first of all, real estate. We don’t know what’s going to happen with real estate at this moment. The first two months, mortgage landlords are saying, “Okay, don’t pay your rent for 2 months. It’s easier to do that than it is to evict somebody and find a new person to come in to rent. So, for now, don’t pay your rent.” Well, how long can that go on before the landlords start feeling pain? Same thing with the mortgages, forbearance. “Don’t pay your mortgage. We get it. Easier to do that than to foreclose, own a bunch of real estate that you’ve foreclosed on and now you got to sell it to somebody else and all that. You know what? Two months of mortgages, we can go without that. We’ll be okay.” But how long can that go on, and how long will landlords and mortgage holders and banks be able to not collect money because the whole real estate industry is around cashflow? And, right now, there is no cashflow. So, how long can that go before something breaks? We don’t know. Lack of clarity.

The other thing is small businesses. It’s a tragedy, but small businesses are going bankrupt at an amazingly depressing pace, and we don’t know what the other side of that looks like. Are we going to be able to just flip a switch and all those businesses just open their doors and go back to business as it was? And everything is fine and this was all just a bad nightmare and we woke up from it and everything’s fine? We just don’t see that. There’s a restaurant right next door to our office building that we love. It’s out of business and gone forever. They’re not coming back. So, we don’t know how many small businesses are going to be able to start up again and go, again.

Also, human behavior. If you look at what’s going on in Wuhan. They apparently have opened everything up — if you believe the Chinese, which that’s another story — but they’ve apparently told everybody to go back. Go do whatever you’re going to do. Well guess what? People are not, even though they can, they’re not. The restaurants are empty. The movie theaters are empty. Human behavior is a factor that we need to have more data on. We don’t know how people are going to behave after all this has passed and how long it will take for people to go back to their former behavior, even though businesses may be open to receive their business.

The other thing that we don’t know about is the debt overhand. So, right now, companies are borrowing, and people are borrowing a lot of money to be able to bridge the gap between now and when we hope this is all over. Well that debt must be repaid, and that debt is going to be a dampener on profits in the future. Companies, if they had $100 of profit before all this, they go back to having the same $100 of profit, but now they’ve got the debt they have to pay so their profits are going to be lower than that $100. So that’s going to be something we don’t know or how that’s going to play itself out.

Unemployment. The Great Depression’s the last time we’ve had unemployment like this, and we don’t know what that’s going to cost and what issues that’s going to bring with it. And, the other thing also, just to wrap up this in a bow as if it’s not enough, is we have the global concerns. What’s going to happen with these poorer countries, like Argentina and Venezuela and Brazil if their economies become devastated, and they are unable to pay back the loans that the world has given them, and that causes a financial crisis?

So, there’s just too much uncertainty, and we are so soon into this. I mean it’s basically a month and a half. It’s insane. That’s just how fast all this has happened. So, we don’t have clarity, and without clarity, we’re not confident in buying back in. Now, we may tiptoe in. We may go in gradually. That’s certainly a possibility. But, right now, we still just don’t feel very comfortable about this.

So, just so you know, we’re worrying about it for you. I think my hair has gotten a little grayer since this last month has happened. We’ve been meeting twice a week. We were meeting every day in February and March, but now that we are no longer in our investments, we feel that it’s not as crucial to meet every day. But we are meeting twice a week now, and we’re still discussing, “What about our bond portfolio? If we buy back into that, what would we buy? How would we construct that?” So, there’s a lot of questions. We’re doing a lot of work. I’ll tell you, it is way easier to be in the market, and just riding the wave, waiting for our sale trigger than it is to be doing all of this. But you know what, that’s what you pay us for. You pay us to worry about all of this for you, and we hope that you have peace of mind and that you are not worrying. Okay? That’s the important thing. Financially, right now, we’re out. So, any damage that might come here in the near future to people who are still in should not happen to us.

So, I guess, the big picture is our posture right now is we’re less worried about missing out on gains as we are missing out on losses. We’d rather miss out on losses than miss out on gains, and so that’s why we’re going to be very conservative, and I think you agree with our philosophy on that.

So, share this video with your friends. Share this video with family. Have them, hopefully, talk to us about their retirement planning. We’d love to help as many people as we can get through this as unscathed as possible. It is our noble purpose. That’s what we want to do. Actually, we consider it our noble obligation to help as many people as we can.

So, that’s our video for now, and we will talk to soon.

MMWKM Advisors, LLC (d/b/a Retirement Planners of America ) (“Retirement Planners of America”) is an SEC registered investment adviser with a primary business location in Plano, Texas. Past performance may not be indicative of future results. All investment strategies have the potential for profit or loss. References to the “invest and protect strategy” (the “Strategy”) and recommendations made under the Strategy from 2007 through 2009 refer to strategies collectively employed and recommendations collectively made by Retirement Planners of America’s principals while employed at Eagle Strategies, LLC., and also at Cambridge Investment Research Advisors, Inc. Four of the five principals remain as principals today, including the Retirement Planners of America’s founder, Ken Moraif, and Chief Investment Officer, Eli Dragon. Retirement Planners of America has been employing the Strategy since its inception in 2011. Therefore, any references to Retirement Planners of America’s performance or its investment advisory recommendations predating 2011 generally refer to recommendations made by Retirement Planners of America’s principals at the respective other firms described above. Like all investment strategies, the Strategy is not guaranteed. It is possible that it can incorrectly predict a bear market (generally accepted as a 20% drop in a market index), which has, in-fact, happened before at Retirement Planners of America and affected its clients accordingly. When the sell / “protect” portion of the Strategy is implemented, affected investors will incur transaction costs and taxable accounts will incur tax consequences. However, when implementing that portion of the Strategy, Retirement Planners of America generally believes that the benefit of avoiding bear markets outweighs the burden of these transaction costs and tax consequences.