Keystone Financial Group

David R. Guttery
RFC, RFS, CAM

Brandon Guttery
RFC

Office: (205) 655-7526
Office Toll-Free: (800) 894-0065
Contact: Send an Email

Why Should I Work With a Financial Planner?

by Brandon T. Guttery, Financial Advisor


Ummm…What Just Happened?

The last year has been chaotic to say the least. We saw a spike in unemployment, a sharp decline in the stock market, and still had a presidential election to sort out. Despite its hectic nature, there are many noteworthy events that unfolded last year and are worth examining further.

Throughout the year, there were a number of “firsts” that took place: we saw the fastest onset of a recession in our country’s history, which subsequently became the shortest but most visceral recession we’ve ever seen, and the highest unemployment rate we’ve seen in the last 70 years. If you find yourself in the midst of a storm, does the captain lower the blinders over the bridge? Or does he actively pilot his crew beyond the fray?

This analogy surmises our client engagement over the last year: rather than burying our heads in the sand, we engaged our clients on a proactive basis, accelerated our review meeting schedule, and increased the frequency of our passive means of contact. While the Coronavirus storm caught many by surprise, we engaged with our clients frequently to ensure we successfully navigated the tumultuous economic landscape throughout the year.

Economic Cycle on Warp Speed

For better context, let’s examine a few pieces of data: From around mid-February to March 23rd of 2020, the Dow Jones Industrial Average lost approximately 18,000 points. That amounts to 19 trading days over which that sell off occurred – to put that into perspective, the last major recession from 2007-2009, as well as the late 1980s recession, did not materialize as quickly as this one. From there, on pencil and paper, our economy moved through the entirety of the economic cycle in approximately two months, from peak to trough and back to peak. For reference, our last oscillation through the economic cycle lasted more than a decade under the Bush and Obama administrations. Regarding unemployment, as per the Bureau of Labor Statistics, our unemployment rate hit 14.8% in April of last year, where by October of 2009 unemployment had only just reached 10%.

The Economic Impact of Significant Events

It is important that we study why events like these are significant, as they played a major role in our client meetings when discussing investment strategy or changes to their financial plan. Understanding these events, as well as the context of the broader economic environment, enabled us to recognize that the economy was not damaged or broken like years past, but perhaps was instead oversold out of fear or panic. At the time, many were unsure whether Coronavirus was another common cold, or the next bubonic plague, and that uncertainty was put on full display as the market declined. We advised that our clients follow their long-term planning goals, and take advantage of what seemed to be short-term volatility, in order to still accomplish their future strategic objectives.

Using the Guidance of a Financial Planner

Working with a Financial Planner will help you to better visualize what your future objectives are, find the most efficient means to achieve them, and remain focused on them through economic downturns. Think of us as contractors: if you’re hiring me for a job, I’ll need the details about the job first so I can bring the correct tool to task. If you’re driving a nail, a screwdriver won’t be of much use, just as a hammer would be ineffective at sawing a log. Our work is tailored, on an individual basis, to the needs and goals of our clients, because there is no one size fits all solution with anything we do.