Today, Josh & Austin have a special guest! As a follow up to our recent Coronavirus episode, Adam Zuercher, CEO and Chief Investment Officer at Hixon Zuercher Capital Management (and an invested dad himself), joins the guys to discuss updates to the status of the virus and the impact to both the economy and your financial plan. This is an episode you won’t want to miss!

Main Talking Points

Our Special Guest, Adam Zuercher! [1:00]

Latest Developments Around COVID-19 [4:30]

What’s Driving All of This Activity in the Market? [10:49]

COVID-19 and the Impact on Sports [13:24]

COVID-19 and its Impact on the Entertainment Industry [19:09]

Gatherings of 100 or More People Banned in Ohio [23:09]

The Toilet Paper Panic?? [26:36]

What is Life Like in Quarantine/Shutdown? [27:46]

Another Huge Factor: Oil Production [30:55]

Stock Market Plunging & Circuit Breakers [32:43]

Areas of the Economy Most & Least Impacted Throughout This Outbreak [35:33]

How Long Will This Bear Market Last? [37:23]

Q&A’s from Our Listeners [42:07]

What Does All of This Mean for the Average Investor? [47:24]

Things You Can Do Right Now During These Crazy Times [52:06]

Your Moment of Comic Relief: The (Second) Dad Joke of the Week [1:00:05]

The Best is Yet to Come!! [1:00:38]

Links & Resources

Corona Panic (Part II) (Morgan Housel)

What’s the Difference Between a Recession, Bear Market, and a Correction? (Wander Wealthy)

Dow closes in a bear market for the first time since 2009—here’s what that means (CNBC)

The Coronavirus…What Should Investors Do Next? (Adam Zuercher)

Social Media

Facebook

Twitter

Instagram

YouTube

Full Transcript

Intro:
Welcome to the Invested Dads Podcast, simplifying financial topics so that you can take action and make your financial situation better. Helping you to understand the current world of financial planning and investments, here are your hosts, Josh Robb and Austin Wilson.

Austin Wilson:
All right. Hey, hey, hey. Welcome back to the Invested Dads Podcast where we are bringing you an important update surrounding the Coronavirus, also known as COVID-19. And Josh, we have a special guest with us. So who do we have?

Josh Robb:
That’s right. Today we have Adam Zuercher with us. He is one of the founders of Hixon Zuercher Capital Management and also one of our bosses. We have two bosses. I can’t tell you which one’s my favorite because I’m not sure who writes my checks. But Adam is here today and he is a chief investment officer and would love to come and talk a little bit about the coronavirus and how that’s been impacting the markets. Adam, why don’t you tell us a little bit about yourself first?

[1:00] – Our Special Guest, Adam Zuercher!

Adam Zuercher:
Sure. Thanks Josh, thanks Austin for having me on your podcast today. Very excited to share the thinking out of Hixon Zuercher Capital Management, we’ve been meeting, it seems like around the clock, whether it’s in the office or virtually from our homes using all the current technology to keep in touch with each other throughout these crazy markets. But, so my story is back in 2002, I left the CPA firm after working there for three years to start this wealth management firm. And as we’ll talk about later, we were actually in a bear market at the time, and not much different than the circumstances we’re in today.

I have some experience with this and I’m looking forward to sharing some things I’ve learned over the years. My experience goes back to 1999. I’m in my 21st year and been working with clients all those years. And so my business partner, Tony Hixon and I, we founded the firm in order to help people create wealth, protect wealth, achieve their financial goals. And we just saw a huge need for guidance from a fiduciary fee-only financial advisor. And so the two of us started with zero clients, zero assets under management. And over, well, we started in 2002 so this coming year will be our 18 year anniversary. And over the past 18 years we’ve been able to build a team that I’m very proud of.

And as we talked about last night, it’s amazing just the level of care that our team has for our clients. And so I can’t wait to share the thoughts that are coming out of our office and the way we’re helping clients, and that sort of thing. But yeah, so today we manage, well, depending on the day, somewhere between let’s just say 160 and 180 of assets under management, 160 to 180 million, serve over 200 households, mostly individuals and families, some institutions. And we’re just here to help people. We want to guide them through these crazy markets.

Josh Robb:
All right. And you are an invested dad as well, like Austin and I. Tell us a little bit about your family.

Adam Zuercher:
Yeah, well, I have three awesome kids. My oldest just turned 16 and I will remember her birthday, her 16th birthday forever because the S&P 500 the last all-time high was February 19th. Her birthday was the 20th.

Josh Robb:
There you go.

Adam Zuercher:
I don’t know if she’s the one that triggered this bear market, but-

Josh Robb:
The panic selling is the new driver on the roads.

Adam Zuercher:
Lots of new things happen in my life. I have my 16-year-old daughter, I have an eight-year-old daughter, and I have a seven-year-old son. Yeah, it’s awesome being an invested dad and my family is one of the greatest joys of my life, and love spending time with them when I’m not in the office.

Josh Robb:
Yup. What are one of the things you’d like to do with them?

Adam Zuercher:
You know our favorite thing to do, and we just talked about this last night, is boating. We have a wake boat and we’re getting into surfing behind the boat. And wakeboarding, surfing, the kids love to do anything in the water, whether it’s swimming, going to the beach or just being out on a boat. And we all like to be out on a boat today-

Josh Robb:
Oh, that would be great.

Austin Wilson:
There’s no virus worries out on a boat.

Adam Zuercher:
I wouldn’t think so.

[4:30] – Latest Developments Around COVID-19

Austin Wilson:
Adam, we had an episode a couple of weeks ago where we talked about the coronavirus at a pretty high level. Things have changed a lot since then and I thought we’d give you the opportunity to share the latest developments around the virus.

Adam Zuercher:
Well, yes. It’s amazing how fast things can change. Just yesterday, both the S&P 500 and the Dow plunged nearly 10%.

Austin Wilson:
Big move.

Adam Zuercher:
Now you’ve seen the psychology of nines, I call it. When you go to buy something, it’s on sale for $99 or $999. Yesterday the Dow dropped 9.99%.

Josh Robb:
Yeah, didn’t want to see the 10.

Austin Wilson:
Yeah, should that make you feel good or bad? I don’t know.

Adam Zuercher:
I think it looks better than a 10% drop, so.

Austin Wilson:
The news was calling it 10 and I knew it wasn’t 10.

Adam Zuercher:
Not quite 10. And look what the futures are doing this morning. Here we are, it’s a Friday morning, it’s about 8:30 AM and the futures are up strong.

Austin Wilson:
6% ish, yep.

Adam Zuercher:
Trading curbs on the future. So people are anxious to buy. That 9.99% discount is a buying opportunity.

Josh Robb:
Exactly.

Adam Zuercher:
Anyhow, yesterday, that was the worst loss for stocks since the crash in October 1987.

Josh Robb:
Daily.

Adam Zuercher:
Daily. Yes. Worst daily drop. Worst point drop for the Dow-

Josh Robb:
Correct.

Adam Zuercher:
-ever. Yesterday’s historic decline ended a bull market that lasted nearly 11 years. As I mentioned before, the S&P 500 hit an all-time high on February 19th. We’re now down 27% from an all-time high. And in that big drop from February 19th through yesterday, I believe it’s the fastest bear market on record.

Josh Robb:
It seemed pretty quick.

Austin Wilson:
It felt like it. Yeah, it definitely did.

Adam Zuercher:
I think the speed of the decline has a lot of people really shaking. You know what I mean? They wonder, “Wow, how fast can we go? How far can we go and how fast will happen?”

Austin Wilson:
Yeah. And you wonder if some of it has to do with technology, the ease of trading now for the average investor. I could place a trade on my phone instead of picking up the phone, calling somebody, asking them to place a trade. It’s a lot easier for me to make that quick decision and not have to talk through with somebody else before that trade happens. Maybe that’s part of the issue as well.

Josh Robb:
And the big boys, think about it, the big boys have electronic trading and automatic trading, and-

Austin Wilson:
Pushing buttons.

Josh Robb:
-high frequency trading, and there are all these triggers that are automatically triggering trades. Yeah, I think it could probably compound the speed that we’ve seen.

Adam Zuercher:
Absolutely. So between computer driven trading and then just the ease of trading, I think in some cases it might be too easy but also very convenient. Technology has made it convenient and it’s given us the ability to act quickly when we need to.

Josh Robb:
Yeah. Unless you’re on Robin Hood. I think David had some trouble [crosstalk 00:07:24]

Austin Wilson:
We’ve had some trouble. There’s some lawsuits coming.

Adam Zuercher:
It’s amazing. There hasn’t been more of that with some of the other brokerages, but-

Josh Robb:
Yeah. Well, even some of them have that in their description or when you sign up you agree to sometimes they will limit trading.

Adam Zuercher:
Exactly. Then we had the Fed getting involved here over the past week. Last week, I believe it was a week ago, Tuesday, the Federal Reserve, they had an emergency rate cut of half a percent. Then yesterday they also took very aggressive steps by flooding the market with one and a half trillion dollars of liquidity and widening their purchases of U.S. government securities. The Fed has taken some really aggressive steps to help keep markets liquid. And yesterday’s news, the market popped for a little bit but not for long, it was right back down.

I think that the market isn’t quite too excited about the moves they’ve made so far. I think they’re expecting more. And I think you can expect more from the Fed. They have a meeting planned for next week and we certainly expect them to lower rates more at that meeting, if not before.

Josh Robb:
And obviously the Fed is really looking at the economy. The market is a representation of the economy, but they’re looking at like flooding all that money into was more liquidity for the banks, making sure that businesses have that cash. And what the stock market does is, should be irrelevant to the Fed, they should be looking at what the economy needs and adjusting it that way, and then hopefully then the market will respond to what the economy’s doing. But hopefully the Fed is indifferent to what the market’s doing and only doing what’s needed for the economy and giving what’s best. They’re not responding to any kind of pressure to help the market recover from its down.

Adam Zuercher:
Exactly. Yeah. The Fed’s job is to worry about the economy, to keep the financial system liquid and I think they’re doing the right things. But yeah, you’re right, they shouldn’t be making these moves just for the sake to prop the market back.

Austin Wilson:
Right. And I think that it’s good to keep in mind that before any virus uncertainty happened. Think about through January, through the beginning of February, really at least here in the States, the economy was doing phenomenal. We just got, last Friday we got jobs report for January, which was amazing. It was just blow out of the water. Good.

Adam Zuercher:
50-year low unemployment number,3.5%

Austin Wilson:
3.5%

Josh Robb:
Yeah, the Fed chair, Powell, he actually said at the end of February that the fundamentals remain strong. And so that was his quote at the end of February. Again, before the virus really set in with this panic that we’re seeing, the economy, the underlying economy was doing well.

Austin Wilson:
Yeah, I’m with Adam. I think that next week on the 18th when they meet or before, we’ll probably get another 50-basis point cut. They just want to make borrowing easier for small businesses that might need it or for people just to keep pushing some spending out in the economy when the uncertain is going on.

Josh Robb:
And I think that small businesses, the key is because they’re the ones that are going to be impacted by a quarantine or any kind of slow down. If people aren’t going out and buying, that’s who’s getting hurt, those small businesses. Anything they can do to help them will have a better impact long-term on the economy to get recovered.

[10:49] – What’s Driving All of This Activity in the Market?

Josh Robb:
What’s next? I mean, what’s driving all this in the market? What do you see? It looks more to me like panic or pain selling. Like there’s kind of this compounding of, “Oh, it looks like people are selling. I should sell too.” Is that what’s going on here?

Adam Zuercher:
Well, we first heard about the Coronavirus, I don’t know, what was it? December, perhaps, when we heard about it in China. And we saw the growth rates in China in January, late January. And then the market seemed to shrug his shoulders for a while. And then even into March here, I was waiting for a bigger reaction from the market. But I think what we saw and also a bigger reaction from our leaders, what are we going to do to keep it from spreading here in the U.S.? And to me, Wednesday night seemed like the turning point for our country. That was the evening that Trump went on T.V. to address the nation from the Oval Office, which I think is only the second time he’s done an address from the Oval Office in his term.

But he gave his speech and I think a lot of Americans believed that this was the first time that Trump took the threat of the coronavirus seriously. And in that speech, he announced new travel restrictions. He announced… and when he announced it though, he made a little goof. He said, “We will be suspending all travel from Europe to the United States for the next 30 days,” which wasn’t quite accurate. When the details were released later that evening, the rules actually barred foreigners who had been in Europe and the previous 14 days from entering the U.S.

Austin Wilson:
Got you.

Adam Zuercher:

I’ve been following all of this on Twitter, which by the way, I think Twitter is an amazing source of information, but it can also be a big source of misinformation.

Josh Robb:
It’s correct, yep.

Adam Zuercher:
But there was some criticism there on how he handled that announcement and it seemed like a rushed decision, and we heard the next day that he really didn’t even consult with European leaders. But for the second night in a row, in addition to that, Americans were expecting some sort of an announcement about some economic stimulus, some sort of a policy that will help the economy as businesses shut down. Very little was announced. There’s a few ideas, but it seemed very clear that politicians are divided on how they should be handling this. And what complicates it is it’s an election year, right?

Austin Wilson:
Absolutely. Yep.

[13:24] – COVID-19 and the Impact on Sports

Adam Zuercher:
We’ll talk about that more later in the show. But within an hour of that speech, that evening, we found out that the NBA season would be canceled, suspended. Now, that’s a big deal.

Austin Wilson:
That’s a big deal.

Adam Zuercher:
I mean, think of all those players, all that revenue. And so, the NBA cancels and then later we find out not much long, a few minutes after that that Tom Hanks has the coronavirus.

Austin Wilson:
And I think that’s a bigger deal than the NBA because Tom Hanks is America’s… he says America’s guy. He’s as American as Apple pie.

Josh Robb:
Yeah, but he got it in Australia.

Austin Wilson:
I mean, maybe he was having some shrimp on the barbie while he did that.

Josh Robb:
That might be. He was on an Island. But he wasn’t alone, that was a problem. If he would have been stranded on an Island-

Austin Wilson:
I hear he’s pretty good at that.

Josh Robb:
He would have been all right.

Austin Wilson:
Okay. So sidebar, Wilson, the volleyball.

Josh Robb:
Yeah. Named after you.

Austin Wilson:
Named after me.

Josh Robb:
I thought so.

Austin Wilson:
Yup.

Josh Robb:
The NBA, what is interesting to me is you would wonder if they continued to have the games with no fans. If that would actually be a boost for their online or their T.V. ads, which then they could ask for more money from the T.V. ads to offset the cost. I wonder, between the two, if they ran the analysis and wondered which one would look wrong-

Austin Wilson:
Well, LeBron was very vocal.

Josh Robb:
I know some of the key stars were not fans of it.

Austin Wilson:
And the fact that the player, the first player that now there’ve been, I think two players that have been infected. But the first player who was really cool about some of the way he handled that. But the first player who did that, they’d been playing. You don’t really show signs for a while, they’d been playing games and games for weeks. And so all the players that he’s had contact with and all this staff, that’s been hundreds of players probably or whatever.

Adam Zuercher:
I think I heard something like 17 teams would have been impacted through all the… and so.

Josh Robb:
And then travel. So everywhere they go, hotels, all that. I mean, that just extends that range. It makes sense. I just, I always wonder like, obviously, they pre-sold all those ads. Are they going to refund those? There’s a lot of costs involved when you do something big like this.

Adam Zuercher:
Speaking of refunds, there’s going to be a lot of upset people about a lot of things. I mean, think of all the things that had been prepaid. We had a volleyball tournament next weekend, big volleyball tournament in Indianapolis, three-day tournament. We had to book our hotel room months in advance. They’re going to refund it, of course. But even the volleyball club that we’re part of, they’ve already paid for all these tournaments. And that’s just a simple example. But think about those that have season tickets to the NBA games, it’s going to be a mess.

But back to your question, Josh, about the selling, what created all this selling yesterday? We had the NBA canceled and it seemed like that was the domino, the first domino to drop. Because throughout the day, yesterday, the following day, we had so many other sports leagues and big venues announcing cancellations and suspensions. The list is pretty long, but it includes NCAA March Madness.

Austin Wilson:
That’s big.

Adam Zuercher:
That’s huge. Imagine the lost revenue there. Major League Baseball’s delayed for at least two weeks. Soccer, Major League Soccer is on hold for 30 days. The NHL suspended their season, the PGA tour is suspended. I heard that the Boston Marathon is postponed till the fall.

Josh Robb:
And that’s crazy. I have a friend at church that qualified for that and he’s planning on going. And so you think you train hard for this date and you have a schedule on how you’re preparing up for that. Now they bump it down the road, and so now you got to continue that training and your body takes a lot of wear and tear for this. I don’t know personally because I don’t run anywhere near where those people do.

Austin Wilson:
This gives people some time to enjoy some Twinkies and bon-bons.

Josh Robb:
But do they though? Or do they have to continue this regimen for longer and what will that do to their bodies? And now you’re running in a different season. A lot of things change. And for something like that, that may be your one lifetime dream to qualify for this and now it may put it in jeopardy on can I actually do this the way I was hoping to?

Adam Zuercher:
We were talking last night at dinner. I think one of the things that really, I don’t know, just saddens me the most, is just look at all these high school kids that right now we’re heading into the state basketball tournament and I’m a big basketball fan. And seeing, it’s every high school basketball player’s dream to play for a state championship in front of a packed crowd and win a state title. My daughter was on a state championship volleyball team last fall and I can’t imagine if we would’ve played the whole season and then knowing that we had the potential to win the title, and then the whole event gets canceled.

Austin Wilson:
And no one’s there. Yeah, exactly.

Adam Zuercher:
There’s a small town down the road from us, Columbus Grove, their high school boys basketball team is something like 25 or 26. We have a client with a son that plays and they’ve had a great season. I think everybody thinks they have potential to win state or at least get to state. Anyhow, I just feel bad for those kids because who knows if they will ever have a chance to play that game? And even if they do, the schools have now canceled all activities for three weeks, so they can’t practice and everybody’s going to be a different team. It’s just going to be a different environment, if it happens at all. And so I just feel bad for those kids that have worked hard for a goal that… but it’s also a life lesson, right? We can’t control these events that happen, but we can certainly control how we respond to them.

[19:09] – COVID-19 and its Impact on the Entertainment Industry

Adam Zuercher
Broadway shutdown.

Josh Robb:
I know.

Adam Zuercher:
Unbelievable

Austin Wilson:
Actually. We’ve been to some Broadway shows, not Allen Broadway, but in Columbus, in Toledo, in Chicago, wherever we’re at, we’ll like to do that. Well, she’s like talking about, I think Lion King is coming to Toledo. I’m sure it’s all…

Josh Robb:
Yeah, it’s been on the T.V. Every time the song starts, my daughter-

Austin Wilson:
We went and saw Lion King in Columbus, I think it’s five or six years ago, and it was amazing. She’s like, “Yeah, let’s go, let’s go.” And I don’t think we’re going now. I think that that’s going to be shut down. But yeah, I mean there’s a lot of cultural impacts now that things are shutting down as well. Any expo in the country, pretty much, with a bunch of people gathering, not happening.

Adam Zuercher:
Not happening.

Austin Wilson:
And one of the big things is the happiest place on earth.

Adam Zuercher:
Yeah.

Austin Wilson:
No longer going to be so happy.

Adam Zuercher:
We’re all Disney fans. We’ve been following the stock, the business. It’s a company that we think is well run and they just added Disney+, which is good for this environment, but what about their theme parks closing? What’s the impact to Disney?

Austin Wilson:
I mean, Disney’s operating income is over half coming from their theme parks and they’ve got theme parks all around the globe. First of all, they have two theme parks in China. Those had been shut down for a while and now I think they’re limited reopening with people having to… limited a number of people with having to wear masks all the time and stuff like that. There’s one in Japan that shut down. I’m sure France has a lot of cases, so I’m sure that one shut down. And as of yesterday, that at least the one in California, and I’m assuming Orlando will follow soon. are going to be shut down too. So big part of Disney’s profits are coming to a halt for a little bit.

Adam Zuercher:
Okay, so I know your listeners are asking the question, what if I own Disney stock? What does this mean for my stock?

Austin Wilson:
Yeah, well, in my opinion, and we follow Disney pretty closely, I think that people are crazy about Disney. People go there and spend obscene amounts of money and this is probably going to only push back, so it’s going to be delayed revenue. This revenue is going to come, this profit is going to come, but it’s going to be pushed back six months, a year, whatever that looks like. You’re still going to take your trip to Disney, it’s just going to be a little bit down the road. They’re going to let this kind of uncertainty pass. We feel like Disney fans are strong enough of fans and care about doing that with their kids, that they’re going to do it. It’s just going to be a little bit.

Adam Zuercher:
Look past the short term.

Austin Wilson:
Exactly.

Adam Zuercher:
Probably hit to earnings in the short-term.

Austin Wilson:
Oh, for sure, for sure.

Adam Zuercher:
But long-term-

Austin Wilson:
Long-term, the thesis-

Adam Zuercher:
-maybe even an opportunity.

Josh Robb:
The other factor though too is ESPN, with all these cancellations, the other part of Disney’s revenue is ABC and ESPN, and that’s another piece that’s factoring in something. Yeah, there’s a lot of short-term issues going on, but in the long run, they’re a big media company that has a lot of different sources of revenue. And I think, again, if you’re a long-term investor, it’s still one to consider.

Austin Wilson:
I actually read an article this morning that this could be the opportunity that Apple was waiting for to buy Disney.

Adam Zuercher:
Wow.

Austin Wilson:
Disney stock’s down, it’s in the 90s.

Adam Zuercher:
They could buy a lot of companies right now.

Austin Wilson:
Apple’s sitting on more cash-

Adam Zuercher:
It’s time to go shopping.

Austin Wilson:
-than they know what to do with it.

Adam Zuercher:
They’ve been waiting for a time like this.

Austin Wilson:
Exactly. And with Iger not being the CEO, it could open up some discussions, but he’s still on the board. So, hey, I’m just saying that’s on the table. Between Apple and Berkshire, and all of that-

Josh Robb:
You read that on Twitter where everything’s true.

Austin Wilson:

Everything’s true. Any company that’s sitting on crazy amounts of cash, I think of Apple and Berkshire specifically. They can go shopping and get a 30%, 40% discount or more if you’re looking in energy and banks.

Adam Zuercher:
That’s going to be fun watching to see what Buffet bought-

Austin Wilson:
Exactly. Exactly.

[23:09] – Gatherings of 100 or More People Banned in Ohio

Adam Zuercher:
Bottom line here I think is the impact of all these cancellations and shutdowns is definitely there’s going to be lost spending, there’s going to be a hit to profits. There is going to be an economic impact. And then furthermore, at the end of yesterday, we found out here in Ohio that our governor has banned most gatherings of a hundred or more. And not only that, but K-12 schools will be canceled for three weeks beginning Monday.

Austin Wilson:
Yeah. That’s crazy.

Adam Zuercher:
It’s crazy.

Austin Wilson:
First of all, that has a huge impact to people who work, parents who work it’s going to be a challenge because that is that their children are at school a lot. That’s a big deal and all the business… I mean, there’s a huge impact.

Josh Robb:
Yeah. And for the kids that that’s their only meal in the day, eating lunch at school, now that’s one of the big concerns is what do you do for these kids who that was their source of food during the school years, that lunch at school. And now they don’t have that either. Providing for those kids and making sure that they’re cared for, because sometimes the parents don’t have the option to stay home with them there. They got to find an alternative. Now I did see online a lot of parents who have high school kids offering their kids to babysit, that during these three weeks they are available, that if parents are in need.

And again the kids get to make some money, awesome. But they also are available then to help those working parents who say, “Yeah, I gotta be at work from 8-5, can someone watch my kids during that time?” And so, I’ve been seeing some cool innovation there and some of the kids take advantage of that. Instead of a kid saying, “Hey, I’m out of school for three weeks,” they’re saying, “How can I help and also be productive and do so.”

Adam Zuercher:
Although I’m not sure it’s a complete vacation for kids-

Austin Wilson:
They still have to do some school work.

Josh Robb:
But if they’re there with a four-year-old or whatever because their day-care’s closed, they could probably do both, I would assume.

Austin Wilson:
Now DeWine did, that’s our governor here in Ohio, he did specify that this is not a mandate for religious gatherings. But, and I know, I think this is the case for all three of us. I think all three of our churches have said no in-person gatherings for this period of time anyway. So we’re going to have an online service at least through the time school’s out. I think that that’s going to be interesting, and I think that that’s an area where our church leadership is taking precaution and trying to be prudent and ahead of the game, where it’s not a… we have a constitutional right to meet, but it’s maybe not the most wise thing to bring all those people together right now.

Adam Zuercher:
Well, and for a church, you hate to think of it like this, but I’m on the financial advisory team at the church. Now, a lot of people have went to online giving or a regular monthly bank drafts, but there are a large number of people that still put money in the offering box every week.

Austin Wilson:
Yeah, there will be an impact.

Adam Zuercher:
And so if the churches closed, I know when anytime we have bad weather and lower attendance, that week has an impact to giving. And if the people that attend the church are impacted economically, that could also be an impact. Hopefully our churches are prepared for something like this. And again, that’s nothing I’m overly concerned about, but it is something that will be an impact.

[26:36] – The Toilet Paper Panic??

Austin Wilson:
I’ve heard that people are panicking and buying up a bunch of toilet paper. This even-

Adam Zuercher:
True story.

Austin Wilsin:
-all around the country, but I know this is the case in Finley. And I think that is crazy because unless this coronavirus scare makes you crap your pants, it seems like overkill. You’re not going to use any-

Josh Robb:
I don’t see that as a symptom of the coronavirus. I don’t know what’s happening.

Austin Wilson:
You’re not going to use any more toilet paper than you would on a normal day. I think that’s a little extreme.

Adam Zuercher:
Josh, you have some friends or acquaintances-

Josh Robb:
Yeah, so a neighbor of ours has a friend in Italy and she was sharing with us a message they were sharing back and forth. But the lady in Italy was talking about how they’d been in a quarantine for multiple weeks since the end of February, and how they still have the ability to go to the store and their store still has stuff in it. And she made a comment that we have toilet paper, I don’t know what you guys are doing over there.

Austin Wilson:
They’re in actual quarantine.

Josh Robb:
There are in actual quarantine. She lives in the Northern Italy. My wife was just sharing with me that message, she was showing me, but I just thought that was hilarious. It’s kind of the question was, “What is going on over there with you guys? What’s this panic on toilet paper?”

[27:46] – What is Life Like in Quarantine/Shutdown?

Adam Zuercher:
You mentioned Italy and I think, we see pictures and read stories about how bad things are and the fear that it’s going to be that bad here. What can they do, Josh? Can they still go to the grocery store and the pharmacy?

Josh Robb:
Yeah, so the way the… and I just read this message my wife had passed on, but the way it was, is they had the ability to go outside. They take walks in the evening, they go to the store when they need something. But it’s just, in a sense saying, “Be smart about this. If there’s a need, you go get the need and you come home. But don’t interact and avoid a contact with people as much as possible.” And so kind of that, the kids are home from school, that’s similar to what we are experiencing now with this closure. But in general, it’s not like you’re stuck in your house, windows closed, don’t leave. It’s more just, “Hey, all unnecessary stuff is eliminated.”

Austin Wilson:
This is like an introvert’s dream.

Josh Robb:
Yeah, it really is.

Austin Wilson:
I guess we should think about what a quarantined economy will look like here in the States because, I mean, I’m not terribly old, but in my lifetime this has never really been a case that we’ve had to deal with. It’s unprecedented in the U.S. But I feel like with kids out of school and many people working from home, people are just going to act differently. They’re going to spend their money differently. Those are definite realities that we’re going to see. I really think that this could see a return to more cooking at home versus eating out, because you’re going to be afraid of running into people and big restaurants full of people and all that stuff. And I love cooking. I think that’s going to be pretty good. I think that’s going to continue that-

Adam Zuercher:
We’ll be over for dinner.

Austin Wilson:
It’s good stuff. I’ll make something good. I’ll tell you what, I think that this could mean more streaming movies on your T.V. instead of going to a movie theater. I think this is going to make people continue to increase their reliance on eCommerce and buying things online because they’re scared to go to the store, whether they should or shouldn’t be, they’re going to be scared to do things. But some things are going to remain. I think that you’re still gonna need to go to the store to get your toilet paper or whatever that might be, milk, things that you really can’t order online. You’re still going to need to go to Kroger to get or whatever that might be.

It’s going to look a lot different. The risk, I think though is that people won’t take this seriously and that maybe after a week or so people are bored out of their minds and just decide to go do whatever they want anyway.

Adam Zuercher:
Right. I mean how long can you put America on lockdown?

Austin Wilson:
Like we’re the land of the free and the home of the brave. You want to brave the coronavirus and be free to do what I want.

Adam Zuercher:
I had the flu before, I survived it. Right?

Austin Wilson:
Exactly, can’t be that bad.

Josh Robb:
And that’s part of the issue is there’s high risk groups of people in low risk and it’s if you’re thinking selfishly, you say, “Hey, even if I get this, the chances are small that it drastically impacts me, so what am I worried about?” But the chance that you could pass that on and not realize it to somebody who could be drastically impacted. It’s that matter of the selfish, “Well, I shouldn’t have to worry about this. Why is it affecting my life?” to, “What could I do to help others from having this drastically impact them?” And that’s going to be the big issue, is how long will people selflessly sacrifice that freedoms they could have to help other people.

[30:55] – Another Huge Factor: Oil Production

Austin Wilson:
I think that we really can’t continue this discussion without mentioning oil.

Adam Zuercher:
Oh, absolutely.

Austin Wilson:
Oil is a huge driver of the economy, right? We saw over last weekend that Saudi Arabia announced that it would drastically increase oil production, which is the opposite of what you need to do when oil prices are down, that’s not good. That sent oil prices down.

Adam Zuercher:
Why they do it?

Austin Wilson:
Well, they did it in response, so Russia pretty much said, “Nah, OPEC, I don’t want to cut production.” As OPEC said, “You should probably cut production because of this oil price slide we’ve been seeing.” Well, the slide turned into a drop and overnight, oil prices dropped 30%, which means every stock involving oil in any way, shape or form was just crushed this week. And that’s not good, and we are in Findlay, Ohio and Marathon Petroleum is across the street from our office. We watch that stock go down for a lot of time. And a lot of this is due to people anticipate oil demand being weak in this time of uncertainty. And then the oil demand being weak causes prices to be weak, and then creating more supply causes prices to be weak. It’s a self-perpetuating downward spiral of oil prices.

So that’s not good. And also people watch high yield treasury spreads as a recession indicator, and a lot of the high yield bond market is oil companies. And when their source of revenue, selling of oil and petroleum products, comes down they become more risky on paper all of a sudden. The yield has to be higher to accommodate investors for that, while treasury yields are stupid low. That spread has gotten really, really, really wide and that has really caused more people to be even more scared.

[32:43] – Stock Market Plunging & Circuit Breakers

Austin Wilson:
That caused, on Monday, the first of two circuit breakers that tripped in the first few minutes of trading in the stock market.

Adam Zuercher:
What is a circuit breaker?

Josh Robb:
A circuit breaker is something that has been implemented into our trading system where if there is a sudden drop in the market, a quick sell off, that this will pause trading for 15 minutes and it just allows everybody to take a breath. And again, when we talk about the automation, there’s a lot of things that can trigger, and if you’re not aware, you could have stuff trigger that you may have stopped because you did not want this because of a real quick downward move. And so, 15 minutes trading is paused and then once it restarts, that circuit breaker won’t be triggered again and the next one has to be triggered.

7% is the first one. If you hit 7%, 15-minute pause, then it reopened the market. If it hits 7%, again it doesn’t pause because that triggers already happened. The next one is 13% and then 20%. This happens throughout the day up until 3:25. Why they chose that? I don’t know. Why couldn’t be 03:30? Who knows? Probably because they were looking at 59.5 and they’d like to confuse people. But after that, then it won’t pause for the rest of the day. That 20%, I think, actually close the market. Is that right, when it hits that?

Austin Wilson:
Yeah. I think 20% closes the market for the day.Just give investors a lot of time to think about what’s really going on.

Josh Robb:
And this week was the first time it triggered since 2008 and it happened twice, and so we had two different times at the… just the 7% one it was triggered. It’s just the downside protection of again, panic, like the idea that there’s compounding on maybe irrational, or things that don’t necessarily have any fundamentals behind it for themselves.

Adam Zuercher:
You think it’s possible that we could have so much panic in the market or so much selling that they actually closed the markets for a cooling off period?

Austin Wilson:
Well there’s a lot of discussion right now around shutting down the NYSE. Now, what that on paper sounds like is that stocks will not be able to be traded, right? You’re not bringing together buyers and sellers at an exchange. The reality is that the shutting down of these stock exchanges is likely a precaution for safety for the traders on the floor and that the stock market would revert to electronic trading only. I do not feel like we are going to, all of a sudden, stock market’s going to be… you can’t buy and sell. I don’t think you’re going to not be able to buy and sell stocks. I don’t think that that is really a reality.

But I think that we could see, especially in New York, where there’s a lot of cases and it’s a state of emergency or whatever, that you could shut down the actual physical stock exchanges. You’d just get online trading.

[35:33] – Areas of the Economy Most & Least Impacted Throughout This Outbreak

Austin Wilson:
I guess we should talk about the economic impact in areas of the economy that stand to be most impacted and least impacted through this. I think that at a very high level, I think that things that will drastically cut back on buying during these times of panic are going to get hurt the worst. That would be travel. We’ve seen that with airlines and hotels, and-

Adam Zuercher:
Most airline stocks are down 50% already.

Austin Wilson:
I know, and obviously oil stocks that drive… travel is hugely impacted in terms of the oil stocks. That’s crazy. Restaurants probably stand to have some risk.

Josh Robb:
Cruise ships, apparently.

Austin Wilson:
I hear cruise ships are not a good place to be, so probably hold off on booking that cruise even though you could probably get a heck of a deal right now.

Adam Zuercher:
Buy one week, get two free.

Josh Robb:
It is right, in the quarantine.

Austin Wilson:
I wonder if you get the coronavirus and get healed, if you’re immune-

Josh Robb:
That’s it, you’re pretty much like-

Austin Wilson:
You can do whatever you want. You can go around the world for $5. But really, anything discretionary is going to be impacted. But there are areas that stand to be lesser impacted or favorably impacted, and those would be obviously businesses relating to medical businesses, hospitals, doctors, those are going to see a lot of action, probably do okay. Pharmaceutical companies either in the treatment in vaccine and drug development for this actual case or other cases, probably going to do okay during this. eCommerce companies, people are going to be crazy about that.

Telecommunication companies because people are going to be communicating from home, for school, for work, for whatever that is. Those can all stand a game. As well as consumer staples companies like groceries and discount stores. Those are probably going to do okay too because of the panic buying. That’s not necessarily due to fundamental changes, that’s due to people going crazy and those are places that could do okay. So Adam, what is a bear market?

[37:23] – How Long Will This Bear Market Last?

Adam Zuercher:
Yeah, a bear market is a drop of 20% or more from the most recent all-time high. You might hear the term correction. A correction is a 10% drop. We’ve had several corrections along the way. Bear markets… Now, we did have a drop in 2011 when Standard and Poor’s downgraded the U.S. debt rating. Summer 2011, we dropped 19%, but never 20% on a closing basis. And then the fourth quarter of 2018, that’s when we dropped… We had a 19% decline. I think it was 19.8%, so some have rounded it up to a 20%, and that bottomed on Christmas Eve 2018, but never broke that 20% number on a closing basis until yesterday. Yeah, that’s the magic number. And history says that the average bear market, some are worse than others, of course. The average bear market does have about a 30% drop.

Austin Wilson:
If you’re rounding, we’re getting there.

Adam Zuercher:
We’re getting real close, down 27%.

Josh Robb:
What do you think about this one? I mean, have we seen it? Like you said, the market this morning is looking up, is are we heading back up from here? Did we see the bottom?

Adam Zuercher:
Oh, so you’re going to ask me to speculate and make a prediction?

Josh Robb:
I want the exact number.

Adam Zuercher:
Okay. All right. Well, we all want to know, don’t we? We’re all bottom fishing right now. If you have some cash, you don’t want to buy until you’re at the bottom, but reality is that no one can accurately forecast that consistently. That being said, I know people love to hear opinions and so I’ll give you my opinion with all the disclaimers attached to, of course. But my crystal ball says, “Look, if you look at the momentum and the powerful move that we’ve seen down this week, it’s been pretty violent selling.”

Austin Wilson:
In the last week. Yeah, the last two weeks.

Adam Zuercher:
Well, yes, it’s just in the past 17 days or so. I really think it’s too early to call this a bottom. Even though we’re seeing a bounce today, you’re going to see those throughout the bear market. 2008, 2009 saw a lot of big up and down days, just like you’re seeing now. But I think what the market really wants here is they want to see an economic stimulus package from the government. And until we know what that looks like, we just have too much economic uncertainty. We also don’t know what the spread of the virus is going to look like. Looking at the initial growth rate in China and the brisk spread that we saw in less than three weeks in Italy, we’ve seen just a glimpse of what other countries face if they cannot slow that contagion.

I do think we are taking the right steps by canceling everything. Do I like it? No, I don’t like it at all. Will it hurt us economically? Yes, it absolutely will. But the problem here that we have is we just don’t know how long it’s going to take to ensure that this is under control. I think the key right now as an investor and trying to determine the extent of this bear market really is there’s just too many unknowns right now. For that reason, I do expect to see at least another 10%, maybe 20% down from current levels. The market hates uncertainty and we have a lot of it right now. Until we get some good news, and we will get good news. Okay?

Austin Wilson:
Yeah, it’s a matter of when, not if.

Adam Zuercher:
It’s a matter of when. History tells us that we will prevail, but until then, we have to brace ourselves as an investor. Prepare yourself for more downside, plan ahead. How are you going to react to that? To talk numbers. Okay, I think a good test for the market will be that December, 2018 low. We talked about that.

Austin Wilson:
Christmas Eve.

Adam Zuercher:
Christmas Eve, 2018, exactly. The S&P level was right around 2,350 at that point. If we can stay above that level, it will act as support and if we start getting better news off of that level, I think you could look at that as a buying opportunity. This would be a total draw down of about 31% from all-time highs that we saw just a few weeks ago, but only 4% down from yesterday’s close. We’re not that far away from that number.

Austin Wilson:
Another unhappy day like yesterday or whatever it could be there, take it right down.

[42:07] – Q&A’s from Our Listeners

Josh Robb:
Speaking of that though, we got some questions in from users and one of them was what are some dumb moves in this market?

Adam Zuercher:
Some dumb moves. Well, I think the one that came to mind when I first heard that question was so everybody working from home, many of them are using Zoom to run their virtual meetings. Zoom is software that allows you to basically video conference and share your screen with each other. And there’s another stock by the same name, and people are buying that stock instead of the actual Zoom stock.

Austin Wilson:
That is a dumb name… or it is a dumb move.

Adam Zuercher:
Dumb move, dumb move. If you’re going to speculate, know what you’re speculating in.

Josh Robb:
Do your homework.

Adam Zuercher:
Do your homework. You know how many times I’ve seen people make the mistake of buying something without doing their homework? And I mentioned Twitter, I really do like Twitter a lot and I’m getting a lot of information from Twitter before I get it from anywhere else. But there’s also, you have to look out, there’s a certain sector on Twitter, if you follow stocks on Twitter, that are pumping stocks, then they’re promoting stocks because they own them. And if you just take random tips off Twitter without doing your own homework, it’s like taking your investing tips from the cocktail hour at the after-hours reception.

Austin Wilson:
I think yet taking buys and sells of the market or specific companies from social media is very dangerous in this environment. It’s best to kind of keep your hat on while you’re keeping an eye on things and doing your due diligence on all of your moves that you’re making. Adam, as investors, what technical factors are going to indicate that we’re headed back into a bear market or that things have bottomed, they’re turning around?

Adam Zuercher:
Yeah, so, well, I think fundamentals are one thing. We know the fundamentals were strong before we had this bear market, so economic fundamentals, that is. And so I think the market has legs to stand on economically. Some people say, “Well, the market was due for a correction,” or I mean correction may be, but a lot of people say, “Well I saw this coming because of last year’s gains.” Well, I think that those gains were justified with the corporate earnings growth the way it was. But I think so now we have the fundamentals, we certainly need to see companies rebound from this.

But the market looks ahead. We haven’t even hit a recession yet and the market’s telling us we’re going to have one. And so the market is forward-looking. And so as far as looking for the end of the bear market, there’s a couple things you can look at. I think the simplest, I’ll give you just a couple of simple things to look at, and those are moving averages. A moving average is just an average of the last days of price. For instance, the long-term trend can be designated by the 200-day moving average. The 200-day moving average is the average price the market has traded at the last 200 days.

And that is often seen as the long-term trend. If that average is sloping up and if the current price is above that line, that’s a positive indicator. Well, right now we’re below the 200-day moving average and the 200-day moving average is falling. If you see that turn around, that’s a good signal that the long-term trend has changed. But if you’re just waiting on that, it could be too late. It’s a slower indicator. You could look at things like the 50-day or the 20-day moving average and the same concept applies.

Austin Wilson:
Yeah, I think that, and I think it’s probably also to understand that at least my opinion is that the economic impact of what we’re seeing right now is probably going to be shorter than we saw in the last big, A: bear market-

Josh Robb:
2008, 2009.

Austin Wilson:
-and B: recession. This is something that after a quarter or a couple quarters, three quarters at the most, who knows… it’s going to be a lot shorter than the last recession we saw. Things will pick up because the underlying fundamentals are way stronger than they were back then.

Adam Zuercher:
Yeah, that was another question we got. I think is too reminiscent of 2008 and people want to know how does this compare to ‘08? And so, what do you see, Austin, watching this every day? How do you think we compare economically to ‘08?

Austin Wilson:
Yeah. I mean, we don’t have the structural issues as an economy with the banks getting crazy out of leverage and stuff like that than we did in ‘08. I think that we have a lot of tests in place that should prevent a financial crisis from occurring, which is really, really good. I also feel like with unemployment at really, really, really low levels, that once people can get back to work and through all of this, they’re going to have a lot of money to spend and things are going to be going pretty well. Should be a little bit shorter but we’ve got to get through the uncertainty before it’s going to make any difference at all. I think this one would get through that. I think that you’ll start seeing things improve in the third quarter this year. I think after the second quarter is going to be the roughest for sure from the big impact here.

[47:24] – What Does All of This Mean for the Average Investor?

Josh Robb:
Yeah. And I think talking between the recession and the bear market we’re going through, the big question is like what does this mean for the average investor? What changes, what should be happening? And when we talk to young investors like this is an opportunity if you are adding to your retirement accounts, if you have every paycheck money going in, your dollar cost averaging through this. And that’s the best thing you can do in this downturn, is you’re buying things at a lower price or in a sense you’re buying more shares every time because they’re cheaper. Dollar cost averaging is a great thing to do, especially when you’re a young investor.

It gives you a lot of time for this to grow through tax loss harvesting, things are down. If you need to offset some gains, you could sell some stuff with not the idea that you’re selling because you’re panicked, but you’re selling to take advantage of some tax situations. Roth conversions, moving money into a Roth IRA, again, at a lower value is a nice tax advantage. Again, we’re just talking tax impacts here because again, you’re moving money that’s invested in an IRA into a Roth IRA. You’re still going to be invested, you’re just doing it at a lower tax cost than you would have a couple months ago. There’s a lot of things out there that are now an opportunity that weren’t worth two months ago.

Austin Wilson:
True.

Adam Zuercher:
Right.

Josh Robb:
And for somebody looking to buy a house with the rate cuts.

Adam Zuercher:
Big opportunity.

Josh Robb:
Yeah. Refinancing or getting a new mortgage. I mean, it’s cheap. If you’re locking in this rate for 30, 15, 30 years, man, you’re going to be happy you’re paying this fixed rate instead of waiting-

Adam Zuercher:
Never a better time to buy a house than now.

Josh Robb:
Right. And again, now is not the best time, but now is a time to look at your risk tolerance. Now, we don’t suggest you make any changes, especially if you’re reducing your risk, now is not the time to do that because things are down. If you’re reducing your risk, that means you sell your equities.

Adam Zuercher:
Would you recommend, Josh, say somebody is experiencing a little bit of pain right now and saying, “I wish I was lighter on my stock allocation and I’m worried things are going to get worse.” Do you recommend that they make an adjustment now or what would you tell them to do?

Josh Robb:
If you’ve stomached through this 25% drop, that’s a big drop already. If you could sit through for the rest of it and let it recover, that’s the best time to make an asset allocation adjustment.

Austin Wilson:
And it might be counterintuitive, but if you’ve got more of a balanced asset allocation, your stock portion, your equity portion is way down. This is actually probably a better time to pull some out of your fixed income and into equities because they’re down so much, which it’s not what your stomach wants to do.

Adam Zuercher:
Especially with rates where they are, if you’re a long-term investor, and this is money you’re investing for the long-term and you’ve had some money in bonds, now could be a great time to redeploy that capital into the stock market.

Josh Robb:
But if you are really concerned about it, we talked about dollar cost averaging it, just readjust where that money’s going. Build your fixed income side or your preservation side up by new money. Don’t change the stocks out, but if you really are panicked about it, just readjust where you’re putting new money in.

Adam Zuercher:
I think a lot of the advice we give is for people who are accumulating assets or still working. But what about those, Josh? I know you meet with a lot of people. One of the things we do a lot of here is help people transition into retirement and then build a stream of income that will last a lifetime. Josh, what would you say to the person who was planning to retire this summer?

Josh Robb:
Yeah, so if you’re planning to retire this summer, hopefully you’ve been talking with a financial advisor and working through a plan, and hopefully they’ve tested that plan against different situations, including what if the market drops heading into your retirement? Because that’s what we consider a bad timing situation, is your accounts are down in value, you’re no longer adding new money to it, and your income goes away. Now I’m drawing money on the portfolio. Testing against those situations hopefully will give you the peace of mind that worst case scenario, I’ve already looked at that simulation and it’s still okay.

But if you have the flexibility and you can work a little longer and let these markets recover, that’s the best choice if you have that option. If you’re able to say, “You know what, I’m going to postpone the retirement for a couple months, six months, see where the market’s at, see if I can get a bounce back in some of my assets.” But the other thing is heading into retirement, having a cash piece where my immediate income needs are covered in something that’s not exposed to this volatility. And for a lot of our clients that talk to us about having this cash reserve where if the markets are down, I stop pulling money out of the market and I start living off of a conservative or a cash piece where I don’t care what the market’s doing because I’m not touching that money for set time period.

[52:06] – Things You Can Do Right Now During These Crazy Times

Austin Wilson:
Adam, wrap it up here for listeners and let’s reassure people and leave them on a positive note with where we feel about how things are going to get better in the future. And talk about some of the very, very practical behavioral things that you can do at this point in what we’re seeing in the markets right now.

Adam Zuercher:
Absolutely. Yeah. We certainly want to remind people that this is the time to be optimistic. This is not the time to allow fear to dominate your investment decisions. Morgan Housel yesterday published a post and we can link to it in the show notes, but I want to quote one portion of that post that I think is very critical for any investor to keep in mind during these times. And that is, “Uncertainty shrinks your field of vision at the worst time. When the world changes in a 24-hour period, it becomes hard to think more than 24 hours ahead. The year ahead is impossible to envision when assumptions you had at breakfast time were destroyed by dinner time. The irony is that long-term thinking is most powerful when everything is falling apart. The majority of long-term results are determined by decisions that you make during a minority of times, and right now is one of those times, it’s a tragic moment to become short sighted.”

What I would say is get the long-term charts out, remind yourself that we’ve been here before. And it’s always hard to know how you’re going to respond to risk until you actually have to respond to risk. And I think there’s just so much happening right now that you just simply can’t control. There’s no use worrying about those things, the list is way too long and you’ll end up with analysis paralysis or you’ll make some very bad moves. I think now is a time of opportunity. A lesson I learned years ago is to focus on the inputs and your response to certain events. Something I learned from Ohio State football coach, Urban Meyer, he hired a guy named Tim Kite during their championship season, and they operated by the following formula that year, E plus R equals O. And that is event plus response equals the outcome.

We can’t choose the events that happened to us, but we can choose how we will respond, and the way we respond to those events will ultimately determine the outcome. Using history as our guide, our response to a bear market should be to stay calm, stay focused on your long-term goals, and look for opportunities. I wanted to take a moment and share a story about a bear market that I turned into an opportunity. I mentioned at the beginning of the show, starting my career in August 2002. We were actually in a bear market at the time. The S&P 500 had reached an all-time high, I think it was around March 24th of 2000. And so we were more than two years into a stock market decline. It was long and painful.

But if you look at the price from March of 2000 to August of 2002, we were down about 40%, 39%, and we started a business in a bear market. And I think just imagine with all that’s going on, look at the possibilities for innovation. Think about the greatest breakthroughs of our history have come from times like this. They’ve come from challenges that seemed insurmountable. I mean, look at the news this morning. We got news that Roche came up with a coronavirus test that will allow them to get results 10 times faster than any test before.

Austin Wilson:
That’s awesome.

Adam Zuercher:
And I’m waiting for someone to come up with treatments or vaccines for the coronavirus. But there’s just so much that we can innovate. How can our healthcare system improve as a result of this? We’re going to learn from this.

Austin Wilson:
Oh, I think so. We already have.

Adam Zuercher:
It’s a time to turn it into an opportunity, but also a time… now’s the time to take advantage of depressed prices in the stock market.

Austin Wilson:
Oh yeah. If you have dry powder or cash, this is the time to be very aggressive with your buying.

Adam Zuercher:
If we just look at history as our guide, our response to a bear market should be just to stay calm. History does tell us that if you would sell at these levels, you’ll look back in 10 or 20 years and regret it. I wrote a blog post about 10 days ago called The Coronavirus- What Should Investors Do Next? And we’ll link to it in the show notes because I think everything still applies even though we’re lower in price than we were then. My conclusion still stands. You wouldn’t be human if you didn’t fear loss. And smart investing can overcome the power of fear by focusing on relevant research, solid data and things you can control. Investors who have the ability to tune out the news, focus on their long-term goals and turn declines into opportunities are better positioned to succeed with their investment strategy.

Stay calm, focus on those things you can control, and that’s how you’re going to achieve your goals. The odds are pretty high that in 2030, we can sit here and have a reunion show, and look back on this moment today and be thankful that we resisted the urge to make an emotional decision in times of turmoil. And lastly, I want to leave you with this. I do think that most people need the help of a financial advisor who’s been trained for times like this, who’s going through the process of being certified as a financial planner, who has some sort of credential and has experience. If you don’t have an advisor, hit us up, we’re happy to talk to you. And if you do, that’s great. Call your advisor if you have questions.

Josh Robb:
Yeah. And that’s key, is if you’re worried about doing this yourself, there are people out there that love doing this and love helping people do you. You’re not in this alone. And if you are struggling, reach out to somebody that is in this industry that is a professional and is able to help you on that. That’s what we love doing. That’s what we’re here for.

Austin Wilson:
And this is the time in a market where financial advisors really earn their keep.

Adam Zuercher:
Absolutely.

Austin Wilson:
What their goal is in this time, it’s easier to take a more passive approach in a very, very strong bull market, but in times like this, when things are down, this is where an advisor is going to talk you out of making a bad decision that is going to impact your financial future and your plan for the rest of your life potentially if you do something really, really stupid.

Adam Zuercher:
Absolutely. And Josh wouldn’t share this, but I’ll share it for him. I watched him yesterday get on the phone all day long, call after call, reaching out to clients, asking them, “How are you feeling? What are your concerns?” And those conversations are very important during times like this. Clients want to know that we are watching things and that we’re here to help. And so yesterday morning when we had our team meeting, I saw our advisor team say, “Now’s our time to shine. We’re going to get out there and we’re going to talk to people.” Josh, what are some things you heard from people yesterday?

Josh Robb:
The nice thing is pretty much everybody I talked to, I can’t think of an exception to this yesterday, is they were thankful for the call just as reassurance. They wanted to make sure I’m not missing anything, right? I’m doing the things we have been talking about. And it was that reassurance of our long-term plan still in place. Your long-term goals are still achievable if we stick to the plan, and that was the reassurance that they needed. It wasn’t, “Here’s anything crazy we’re doing, anything special.” It’s just let’s go back again and say, “Okay, where are we at? Where are we going? And are we still on the right path to get there?”

[1:00:05] – Your Moment of Comic Relief: The (Second) Dad Joke of the Week

Austin Wilson:
Adam, I know this has been a heavy topic.

Adam Zuercher:
Yes.

Austin Wilson:
But because it’s Friday, I think we should have a dad joke of the week. The second dad joke of the week, special dad joke.

Adam Zuercher:
A dad joke?

Austin Wilson:
Even on a coronavirus episode.

Adam Zuercher:
Okay, well, I do love telling dad jokes, sometimes even laughs. Why is it so hard to tell a joke to retired people?

Austin Wilson:
Why is that?

Adam Zuercher:
Because none of them work.

Austin Wilson:
Josh is going to write that down.

Josh Robb:
I like that one. I want to keep that one, it’s a good one.

[1:00:38] – The Best is Yet to Come!!

Austin Wilson
Well Adam, we are so thankful that you were able to take some time because it is an all hands-on deck, busy time of the year.

Adam Zuercher:
No, no, no, no, no. I am thankful for you guys. And so before we go, I brought a gift for you guys. Are ready for this?

Austin Wilson:
Uh-oh, I didn’t know it was a gift day.

Josh Robb:
Oh man. And I didn’t bring anything for you.

Adam Zuercher:
I buy gifts in bear markets, though here you go guys.

Josh Robb:
Oh boy. For all the audience that can’t see, which would be everybody, we, Austin, I are getting Dow 30,000 shirts from Adam. And so we’re in anticipation for-

Austin Wilson:
The bounce back.

Adam Zuercher:
Dow 30,000 Okay, so the shirt. What color is the shirt?

Josh Robb:
Green.

Austin Wilson:
It’s green.

Adam Zuercher:
Aren’t you tired of seeing red?

Austin Wilson:
I know. Let’s be bull-ish

Adam Zuercher:
I want to get some green around the office today. Dow 30,000. I mean, that was reachable just-

Austin Wilson:
We were close.

Adam Zuercher:
-two months ago and you know what? It’s a reminder that Dow 30,000 is still a number we will hit one day. There’s no such thing as an unrealistic goal, just an unrealistic deadline.

Austin Wilson:
It’s a reminder that the best is yet ahead.

Adam Zuercher:
Absolutely.

Austin Wilson:
We’re going to come through this-

Adam Zuercher:
The best is always ahead.

Austin Wilson:
-as a country, as an economy, it’s going to be better. Let’s do it.

Well, as always, especially in times like this, don’t hesitate to check out our website because we’ve got a brief list of Eight Timeless Principles of Investing that are really going to try and keep you on track in times like this where things are uncertain, moving every day, huge swings. Check it out, it’s free on our website.

Josh Robb:
And make sure you share this podcast, especially if you know anybody that’s been asking about this bear market recession or anything going on. Share this with your friends and family. Send us any questions or ideas you have at hello at theinvesteddads.com and make sure you like and review us on Apple Podcasts.

Austin Wilson:
And in case you missed it, check out our recent episode where we discussed streaming services.

Josh Robb:
I will thank you Adam for joining us and we wish everybody a good and safe weekend.

Adam Zuercher:
Thank you.

Outro:
Thank you for listening to the Invested Dads Podcast. This episode has ended but your journey towards a better financial future doesn’t have to. Head over to the investeddads.com to access all the links and resources mentioned in today’s show. If you enjoyed this episode and we had a positive impact on your life, leave us a review. Click subscribe and don’t miss the next episode.

Josh Robb and Austin Wilson worked for Hixson Zuercher Capital Management. All opinions expressed by Josh, Austin or any podcast guests are solely their own opinions and do not reflect the opinions of Hixon Zuercher Capital Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Hixon Zuercher Capital Management may maintain positions in the securities discussed in this podcast. There is no guarantee that the statements, opinions, or forecasts provided herein will prove to be correct.

Past performance may not be indicative of future results, indicies are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.