“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”
– William Arthur Ward

This has been one of the windiest periods I can remember in the 40 years I have lived in Grand Junction. Mornings have generally been the calmer part of the day but as the day wears on the wind seems to pick up, so that it is blowing its hardest when I’m out trying to throw the frisbee to the dog.

I’m afraid that our economy and financial markets are facing some pretty strong headwinds too. Slamming the brakes on a full throttle economy created a lot of chaos. Reopening the economy is proving to be difficult as we are seeing cases of the virus spike up, particularly in states where it wasn’t a more gradual reopening. Unemployment has risen to double digits and I wonder if the worst is over. A lot of businesses took part in these PPE loans that are forgivable if you keep everyone on your payroll that was there in February through September. If our economy isn’t back to pre-COVID levels by the end of September, companies may begin laying off people and our unemployment rate could go higher. Many states and local governments rely on sales and use taxes for revenue. If those continue to be low, these entities are going to have to make cuts in spending, which would be a drag on the economy that we haven’t seen yet. Small businesses provide most of the jobs in our country and we haven’t had time to really see how many of them have survived and how many simply won’t reopen. Throw in the November elections and there are some pretty good headwinds for our economy.

I’ve always been somewhat of an optimistic realist (if there can be such a thing). I feel that there will be a vaccine developed and that we will learn from this episode and be better prepared for the next one, but that will take a bit of time. Things will get back to “normal” again, in time. In the meantime, we need to do things to get us through this and prepare us for “normal.” As the beginning quote says, we need to adjust our sails.

Now is a good time to take a look at our spending patterns and see if and where we can tighten our belts. It’s also a good time to raise up our cash reserves. Even though interest rates are low, having a bit of cash for emergencies is good. And, since interest rates are so low on savings, we might also consider paying down debt. It’s a good time to review our investment strategy to see if it is appropriate for where we are heading. Are any of our investments in areas that may not be a part of our new normal? It could also be time to adjust our charitable giving as there are many, many organizations out there doing a lot of good that are hurting for funds.

I’ve been a student of history and the thing I have noticed is that the people who survive trying times are those who haven’t fought against the headwinds, but those who have adjusted their sails to continue towards their goal.

These are the opinions of Legacy Wealth Management, LLC and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.

Mike Berry is a Registered Representative offering securities through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Legacy Wealth Management, LLC and Cambridge are not affiliated. Cambridge does not offer tax advice.

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