Quote of the Week
“Believe in yourself! Have faith in your abilities! Without a humble but reasonable confidencein your own powers you cannot be successful or happy.” – Norman Vincent Peale
If you were looking for last week’s letter, there wasn’t one. I’m back after a two week bout with COVID. Testing negative and feeling better.
This letter is a little late this week because I wanted to see the earnings reports for the big tech companies that reported this week. They were a disaster. Enough said.
As of now, 189 companies of the S&P 500 have reported earnings per share in aggregate of a decline of -3.3% year over year. That doesn’t sound too bad, but if you factor in the earnings of the Energy sector which was up +180% year over year it is clear that the rest of the sectors of corporate profits are going south pretty fast. The Communications Sector in aggregate earnings have crashed -24.3% year over year.
I know history is not always a precursor of the future, however the last time the economy was in Quad IV for four straight quarters in a row, the market was down -54% in the 2000 to 2002 period. I can quote multiple statistics of current indicators going south, but why bother. The rate of change going negative is accelerating. I am afraid that this decline is not close to being over.
We are currently positioned at 92% Money Market cash. The position we have in the market is in private equity.
Recently a number of my friends and acquaintances have passed on. Some of their spouses were adequately prepared for the situations that are a part of this life transition and others were not. I came across the following article from Broadridge that is a good guide on how to be prepared for the passing of a spouse. It’s not a very cheery topic but is one that should be addressed.
Organizing Your Finances When Your Spouse Has Died
Losing a spouse is a stressful transition. And the added pressure of having to settle the estate and organize finances can be overwhelming. Fortunately, there are steps you can take to make dealing with these matters less difficult.
When your spouse dies, your first step should be to contact anyone who is close to you and your spouse, and anyone who may help you with funeral preparations. Next, you should contact your attorney and other financial professionals. You’ll also want to contact life insurance companies, government agencies, and your spouse’s employer for information on how you can file for benefits.
Getting expert advice when you need it is essential. An attorney can help you go over your spouse’s will and start estate settlement procedures. Your funeral director can also be an excellent source of information and may help you obtain copies of the death certificate and applications for Social Security and veterans benefits. Your life insurance agent can assist you with the claims process, or you can contact the company’s policyholder service department directly. You may also wish to consult with a financial professional, accountant, or tax advisor to help you organize your finances.
Locate important documents and financial records
Before you can begin to settle your spouse’s estate or apply for insurance proceeds or government benefits, you’ll need to locate important documents and financial records (e.g., birth certificates, marriage certificates, life insurance policies). Keep in mind that you may need to obtain certified copies of certain documents. For example, you’ll need a certified copy of your spouse’s death certificate to apply for life insurance proceeds. And to apply for Social Security benefits, you’ll need to provide birth, marriage, and death certificates.
Set up a filing system
If you’ve ever felt frustrated because you couldn’t find an important document, you already know the importance of setting up a filing system. Start by reviewing all important documents and organizing them by topic area. Next, set up a file for each topic area. For example, you may want to set up separate files for estate records, insurance, government benefits, tax information, and so on. Finally, be sure to store your files in a safe but readily accessible place. That way, you’ll be able to locate the information when you need it.
Set up a phone and mail system
During this stressful time, you probably have a lot on your mind. To help you keep track of certain tasks and details, set up a phone and mail system to record incoming and outgoing calls and mail. For phone calls, keep a sheet of paper or notebook by the phone and write down the date of the call, the caller’s name, and a description of what you talked about. For mail, write down whom the mail came from, the date you received it, and, if you sent a response, the date it was sent.
Also, if you don’t already have one, make a list of the names and phone numbers of organizations and people you might need to contact, and post it near your phone. For example, the list may include the phone numbers of your attorney, insurance agent, financial professionals, and friends–all of whom you can contact for advice.
Evaluate short-term income and expenses
When your spouse dies, you may have some immediate expenses to take care of, such as funeral costs and any outstanding debts that your spouse may have incurred (e.g., credit cards, car loan). Even if you are expecting money from an insurance or estate settlement, you may lack the funds to pay for those expenses right away. If that is the case, don’t panic–you have several options. If your spouse had a life insurance policy that named you as the beneficiary, you may be able to get the life insurance proceeds within a few days after you file. And you can always ask the insurance company if they’ll give you an advance. In the meantime, you can use credit cards for certain expenses. Or, if you need the cash, you can take out a cash advance against a credit card. Also, you can try to negotiate with creditors to allow you to postpone payment of certain debts for 30 days or more, if necessary.
Avoid hasty decisions
- Don’t think about moving from your current home until you can make a decision based on reason rather than emotion.
- Don’t spend money impulsively. When you’re grieving, you may be especially vulnerable to pressure from salespeople.
- Don’t cave in to pressure to sell or give away your spouse’s possessions. Wait until you can make clear-headed decisions.
- Don’t give or loan money to others without reviewing your finances first, taking into account your present and future needs and obligations.
If you have friends or family in need of financial life planning services,
It would be the honor of Laurence Lof Financial Advisors to assist them.
We value your referrals!
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These are Larry Lof’s opinions and not necessarily those of Cambridge, are for informational purposes only and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs.
The S&P 500 index of stocks compiled by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The Index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Indices mentioned are unmanaged and cannot be invested into directly.
Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.