Current Events Q&A with Jerry Ask, CFP®

With an upcoming election and Covid-19 extending into the fall season, there is a lot of uncertainty in the world of 2020. What does this mean for you, your retirement and your valuable assets? We sit down with financial advisor, Jerry Ask, to gain insightful perspective and advice as you look ahead to the future.1


Q. How has Covid-19 affected my retirement?
A. From a financial standpoint, unless you sold your stock securities during the market low points this spring, the markets are back near all-time high numbers recorded in February.
From a social and travel standpoint, Covid-19 has greatly affected everyone and will likely change things, maybe even permanently. Traditions like handshakes and face-to-face appointments will be affected for a long time. Most business will continue to be done by phone and by computer. Most of our clients are making minimum trips outside the house, and when this changes is yet to be seen.


Q. What is the current state of the markets?
A. The stock and bond markets are forward looking vehicles. How they perform today is largely due to how investors believe the economy will look 6-12 months from now. Factors affecting the markets include GDP, corporate earnings, inflation, interest rates, elections, and a Covid vaccine. Each day the markets “price-in” new events and announcements and how they will affect the financial factors listed above. Drastic events, fear, and optimism, like we had this spring, produce drastic fluctuations and volatility as we experienced in Feb (Dow 29,000+) March 23rd (Dow 18,000+) and Aug (Dow 28,000+).


Q. What should investors do right now?
A. I would recommend continuing to have a long-term perspective which most of my clients have done. They have remained calm and have not let emotions lead to quick, knee-jerk reactions, which often times work against you. The tech stocks are leading the way in the current market and our clients have a good share of the “Big 5”: Microsoft, Amazon, Apple, Facebook and Google (Alphabet). These stocks have reported good profits. Of course, that won’t always be the case, so we stay diversified and use asset allocation. No one knows for sure what area of the markets will perform best in the future, so our investors have money invested in most asset categories. We do, however, try to be overweight in areas we think will perform better near term and underweight in areas we’re not so optimistic about.


Q. What are the benefits of retiring early?
A. Depending on the person, a benefit would be lower stress from not going to work, which has health benefits. There is more time for friends, family, hobbies, traveling, or an enjoyable part-time job. In my 30+ years as a financial advisor, only a few clients have told me “I wish I would have kept working.” However, many have told me how busy they still are, but busy doing activities they enjoy. They wonder how they had time to get everything done when they were working.


Q. What are the benefits of postponing retirement?
A. Financially, it’s almost always more beneficial to keep working. Your current salary is probably higher than your pension (if you have one) and your social security added together. Also working gives you more time to build your 401k or IRA, and you’re not withdrawing from your retirement accounts, allowing them to grow and compound. Your current income is probably higher, but not as much as you might think once you factor in possible higher state and federal tax rates, the FICA paycheck deduction, and your 401k contribution. Other benefits may be your friendships at work and the satisfaction of being productive and part of a team.


Q. How are investments performing at JKA Investments vs. national averages?
A. Past returns are no guarantee of future results; however, I’m very pleased with our performance in 2019 and year-to-date 2020, given our balanced portfolios. Since I’m usually managing my client’s retirement “nest egg,” our portfolio typically consists of both stocks and fixed income investments. Our goal is to generate long-term growth while doing so with less volatility because of our diversified approach.


Q. How will the elections affect my retirement plans?
A. It’s yet to be seen, but in my opinion the market so far hasn’t shown much volatility due to the upcoming election. However, that is likely to change as we get closer to November. The market will weigh the candidates with how they believe each will affect the US economically—looking at specific issues such as taxes, foreign trade, government regulations, unemployment, etc.

1 Opinions expressed are those of the author and not necessarily those of Raymond James. No statement within this document should be construed as a recommendation to buy or sell a security.