So what if the market does go down again?

Over the past several weeks, the stock market has experienced both the fastest crash and the most robust bounce ever seen. Right now, while things are relatively calm, I want to underscore the following points that are profoundly important to your investing success.

  • When stock prices are going down, the enduring value of the underlying companies is going up. A market decline is therefore always to be experienced as a sale, and the very nature of sales is that they are temporary. The lower prices go, the more value is to be had at those prices. You instinctively know this about virtually everything else in your economic life. If you can’t apply that same correct instinct to the stocks of America’s and the world’s great companies, it’s not probable that you can ever become a successful investor.
  • Staying fully invested during temporary market declines is the only sure way to capture the entirety of the market’s permanent advance. It is not possible consistently to sell out of falling markets, and later buy back into already advancing markets, thereby capturing the long-term returns of equities. Those returns are your reward for staying calm.
  • You never try to make long-term investment strategy out of short- to intermediate-term disruptions. We have a plan for getting you to the goal you need to reach, in order to secure a successful retirement. To achieve that goal, you need to invest consistently. And to stay invested, not just when the sun is shining.
  • Perhaps more today than ever, bonds, CDs and the like are not an alternative. At the moment, the cash dividend of the S&P 500 is close to three times the yield on the 10-year Treasury note. Even if dividends were to halve in the current crisis, and interest rates stayed where they are, stocks would still yield more than the 10-year Treasury. I’ve never seen that before, and when this crisis passes, I don’t ever expect to see it again. Bonds are simply not, in my judgment, a rational alternative to stocks for the long-term investor.
  • How low the stock market ultimately goes in response to the economy’s cardiac arrest is both unknowable and — to the long-term, goal-focused, planning-driven investor — irrelevant. (Unless, of course, he/she is still in accumulation mode, in which case a renewed decline would be a genuine godsend.)

I hope sharing our enduring principles helps both steady you in the present and focuses you on your long-term success. As always, if you have any questions don’t hesitate to give me a call.

When the world goes as haywire as it’s done lately, you may have occasion to question your investment strategy — and even your overall financial planning. If so, you may wish you could get an objective second opinion you can trust, from a friend. I hope you’ll know me to be that friend.

Wishing great success,
Chris

Chris Mullis, Ph.D.
Founding Partner
Financial Planning.
Wealth Management.
Since 2006

AskNorthStar.com
(704) 350-5028

 

Paradigm shifts (and how to keep up)

Life has changed; how do we adapt without losing sight of what we want to achieve?

As you’ve heard me say before, no one knows how the future will play out, but we should still look ahead and think through the consequences of what’s happening. (More about this kind of second-order thinking ahead.)

I believe that our society and our economy are experiencing a massive paradigm shift.

We will never go back to the world we had before COVID-19, and the lens that we used to evaluate ideas, markets, economies, and personal choices over the last decade may not be sufficient for the next decade.

Here are just a few things that I see changing as a result of what’s going on now:

Social Support: 36.5 million Americans have become unemployed in two months, and the effects are rippling through families, communities, and the economy.1 The government has responded with trillions of stimulus dollars to individuals and businesses. More relief is likely to come. What does this mean for our society? Who should get a helping hand in tough times? Will we permanently expand the social safety net?

Work: Thrown into the largest work-from-home experiment in history, more workers and employers will transition to remote work post-pandemic. This shift in work has major implications. Which places will be a draw if workers can live anywhere and employers can have their pick of a nationwide (or global) workforce? Will those who must physically show up demand different compensation?

Education: Students, parents, schools, and universities are being forced to re-evaluate the definition of education now that the on-campus experience has gone online. What’s missing if you attend from home? What alternatives to a traditional four-year degree will arise?

Shopping & Entertainment: Brick-and-mortar retailers may never recover from the body blow dealt by pandemic lockdowns. Online shopping, grocery delivery, and digital services may finally overtake offline channels. What will the retail landscape look like when it’s easier (and maybe safer) to eat, shop, and watch at home?

What do you think? What do you see changing in the world? Please email me at chrismullis@nstarcapital.com and share your thoughts.

No one has all the answers about the new world and things are not always what they seem.

Though it appears that the stock market has moved past the pandemic, we shouldn’t celebrate just yet.

Why?

Much has changed in the world and we’re still playing out first-order effects. More consequences are coming.

“What are the second- and third-order consequences of this?” is a question big thinkers like Ray Dalio (manager of the largest hedge fund in the world) ask about complex scenarios.

Here’s what they mean:

First-order thinking is fast and simple: B is the logical outcome of event A.

But then what? What happens as a consequence of B?

And what happens as a result of that? And what is the follow-on effect of that?

Second-order thinking is about interactions and complex systems. It’s slow and hard (but mastering it can put us steps ahead of the crowd).

Understanding the new world that’s growing out of the pandemic requires thinking through these higher-order consequences and developing a new lens to navigate the uncertain waters ahead.

How can we adapt? How can we still pursue our goals in a totally different world?

We think it through with humility and an open mind.

We hone our second-order thinking skills by asking: what could happen? And then what? How likely is it that I’m right? What could happen if I’m wrong? How do I position myself?

We’ll do it together.

COVID-19 is going to be with us for the rest of 2020 and possibly into 2021. So we’re adapting.

At NorthStar Capital Advisors, it means we will remain entirely online for the time being.

It also means big changes in our personal lives. Our children are learning online through the end of the school year and perhaps back again this fall. My wife continues to be Super Woman managing our home and our department of education.

We’re taking it day by day and thinking through those higher-order effects.

How about you? What changes are you making to your plans this summer and fall?

Be well,
Chris

Chris Mullis, Ph.D.
Founding Partner
Financial Planning.
Wealth Management.
Since 2006

AskNorthStar.com
(704) 350-5028

P.S. A number of clients and friends have reached out to talk through options around a potential lay-off, buy-out offer, or early retirement. If this is on your mind, please let me know. We can work through it together.

P.P.S If you’ve got a kid in college this fall, I have a question for you: is virtual university still a compelling offer? Are you and your student considering a gap year or some alternative? Please email me at chrismullis@nstarcapital.com and let me know. I’m interested in learning from your experience.

1https://www.washingtonpost.com/business/2020/05/14/unemployment-jobless-claims-coronavirus/

Chart source: https://www.artsci.com/studentpoll-covid-19-edition-2 

Do this to plan for a recession (2-minute video)
Current data tells us that the economy is in a steep contraction due to the coronavirus.

We don’t know how long it will last or how long the economy will take to recover.

How can we protect ourselves when we can’t predict the future?

We made a short video showing you exactly how the most successful companies in the world prepare when the future is unknown.

You can watch it here.

Click here to watch!

Warmly,

Chris Mullis, Ph.D.
Founding Partner
What the “new” normal could look like…
I hope you’re safe and well.

It’s been weeks since we shuttered the office and started working from home and, like many, I’m feeling the strain of upended life.

How about you? Are you ready to venture out again?

In this post, I thought I’d give you a rundown of some of the latest economic projections as well as a sneak peek of what post-lockdown life could look like for us soon.

(Ready for a break from COVID-19? No worries. Scroll down to the P.S. for some wonderful distractions.)

On to the economy.

You may have seen a headline showing that U.S. economic growth dropped -4.8% in the first quarter after posting 2.1% growth in Q4 2019. That’s not a surprise.1

Unfortunately, worse news is ahead since widespread layoffs and shutdowns didn’t hit until late March. Here’s a projection of what the next few quarters could look like for the economy.2

You can see in this chart that the coronavirus hit the economy like a tsunami. Q2 could be the worst quarter since the Great Depression.3

The arithmetic of recovering from a 30%+ drop in economic growth means that it could take many months (maybe even years) to return to pre-pandemic GDP levels, especially if we face multiple waves of infection.

Let’s mentally prepare for that.

April 2020 is likely to be one of the worst months for the economy in history; contradictorily, it was also a blockbuster month for stocks.4

Why are stocks so disconnected from the economic data?

Fundamentally, a stock’s price is an attempt to put a value on the underlying company’s earnings now and in the future. Complicating the calculation are factors like fear, greed, uncertainty, and movements in the overall market.

While economic data looks back at what has already happened (or is happening now), the stock market looks forward at the trajectory of the business environment. Framed that way, the rally isn’t so unusual since investors are expecting things to get better, not worse.

Will the rally continue? Hard to say. Volatility is very likely to be the name of the game for months.

Economists are predicting a rebound in Q3 2020. Are they right?

You know by now that we can’t perfectly predict what the recovery will look like; all economic estimates are based on educated guesses about spending, business investment, trade, and other factors. The biggest unknown is “personal consumption” by folks like you and me. Our spending drives 70% of economic growth.

The pace of the recovery depends on how quickly businesses reopen and consumers go out to shop, eat, travel, and spend money. If people don’t feel safe going out or don’t feel confident enough to open their wallets, growth could take longer to come back.

What do you think? Will you go back to your pre-coronavirus routine? Email me at chrismullis@nstarcapital.com  and let me know. I’m interested in hearing your perspective.

What could life look like as North Carolina reopens? While America is just now taking the first tentative steps toward reopening, many countries around the world are farther along, offering us a glimpse of what daily life might look like in a world where the coronavirus still remains a threat.5

Hong Kong: Restaurants are open but tables must be spaced farther apart.

South Korea: Pro sports are back but athletes play to empty stadiums. Temperature screening is in place in many buildings.

Taiwan: Schools are in session but assemblies are canceled and students wear face masks in class.

Australia: Beaches are open but sunbathing, picnicking, and large gatherings are verboten.

How long will coronavirus precautions overshadow our daily life? Realistically, some restrictions are likely to drag on until a vaccine or breakthrough treatment becomes widely available.

What do you think? What will our “new normal” look like?

Warmly,

Chris Mullis, Ph.D.
Founding Partner


P.S. I promised you some distractions from the coronavirus, and here they are:
Watch jellyfish float at the Monterey Bay Aquarium (includes relaxing music!).
Dream of a Caribbean vacation with the beach cam at the Soggy Dollar Bar on Jost Van Dyke.
SCUBA dive vicariously in a kelp forest off Anacapa Island.
Watch the live cam at Tembe Elephant Park.
Take an hour-long walking tour around Paris.

Enjoy!

—

Sources
1https://www.bea.gov/news/2020/gross-domestic-product-1st-quarter-2020-advance-estimate
2https://www.cbo.gov/publication/56335
3https://www.marketwatch.com/story/echoes-of-the-great-depression-us-economy-could-post-biggest-contraction-ever-2020-03-19
4https://www.marketwatch.com/story/after-a-blockbuster-april-for-the-dow-and-sp-500-is-sell-in-may-in-the-coronavirus-era-a-smart-strategy-2020-04-30
5https://www.nytimes.com/2020/05/02/world/asia/coronavirus-china-hong-kong-south-korea-australia.html

 
Your action plan for uncertainty (2-minute watch)
COVID-19 is coursing through America and there’s no doubt that we’re in for a tough time.

The weeks and months to come are going to be hard for all of us.

What actions can we take to protect ourselves when things look so uncertain? How can we build resiliency?

We made a short video showing three key actions you can take to help protect yourself and use this crisis to grow stronger.

Click to watch it here.

Warmly,

Chris Mullis, Ph.D.
Founding Partner
What lessons will you take from this?

So much is unknown.

Do we reopen or wait?

Are we past the peak? Or just over the first summit of a mountain range?

Are we safe yet?

After weeks of restrictions, it’s easy to feel that we’re swirling in a maelstrom of uncertainty, helpless to make decisions when so much remains unknown and out of our control.

The uncertainty, the personal losses many have experienced, and the everyday challenges of socially distant life can shake our foundation and cause us to lose touch with what’s most important.

I think that’s normal. We’ve traded a trip on the highway for an off-roading adventure. And we don’t know where it’s going to take us this year.

So let’s lean into the uncertainty. Let’s embrace it and use it as a wake-up call to explore and appreciate what really matters.

Our health. Our family, friends, and loved ones. Our home. Our community. Our compassion and creativity. Our resilience as human beings.

As for me, I have some moments of frustration, but I’m staying grounded by playing outside with our kids and working in the yard.

I’m also learning a lot about myself. I’ve learned that I really enjoy sitting face-to-face in the same room with clients, friends, and colleagues. I’ve learned that I’m not “camera ready” for Zoom meetings nor remote TV interviews, but I’m humbly trying to get better.

I’m working on gratitude and enjoying simple things like dinner-time conversations, our weekly visit with my parents, and fresh air.

I’m grateful to have a wonderful family, a comfortable home (aka The Bunker) and deeply meaningful work.

I’m grateful to have you.

On the professional side, I’m focused on what we can control on our clients’ behalf and staying abreast of what might come next. Our mantra right now is: “one day at a time.”

How are you? I’d love to hear how you are coping. What lessons are you learning about yourself? What have you had the courage to try for the first time? Hit “reply” and let me know.

This pandemic is scary. But it’s also a once-in-a-lifetime chance to hit the “reset” button and connect with the creativity, joy, and good old human ingenuity that can flourish within the limitations of pandemic life.

Eventually, we’ll recover from the pandemic. It’s not clear yet what that will look like, and we’ll likely see more hard days before we get there. Businesses will reopen, people will go back to work, the recession will pass, and the country will rebuild.

We will heal. But some marks will remain as reminders of our experience.

The Great Depression taught people to clip coupons and “make do or go without.” 9/11 upended our travel rituals and awareness of terrorism.

Some lessons from the pandemic will stay with us long after the immediate crisis fades. Some will be unconscious; maybe we’ll become a society of dutiful hand washers and social distancers.

Others will be lessons we consciously take with us about our values and ability to adapt to circumstances far beyond our control.

I’m hopeful and excited to see what we learn. Let’s make it good.

How has the pandemic changed your perspective? What new values and priorities will you bring out of your experiences?  Email me at chrismullis@nstarcapital.com and let me know.

Be well,
Chris

 

Chris Mullis, Ph.D.
Founding Partner
NorthStar Capital AdvisorsFinancial Planning.
Wealth Management.
Since 2006

AskNorthStar.com
(704) 350-5028


P.S. Do you know someone who is having a hard time and could use some financial advice? We’re holding a few spots open for folks who could use a professional’s help. If you can think of someone, please reply to this email or call (704) 350-5028 to let me know.

P.P.S. And don’t forget about our special COVID-19 pro bono planning we created to support individuals and families who can’t afford fiduciary advice and financial planning.

V, W, L, or Swoosh? (no, it’s not a meme)
Everyone you and I have ever met has been affected by the coronavirus.

My childhood friends in Charlotte, strongman Kristofer Hivju, and the folks I met in Lesotho, Africa.

And it’s Day #18 in the hospital for my father-in-law fighting the disease. He’s now in a federal field hospital and hopefully coming home very soon.

It’s likely that every human on the planet has been affected by COVID-19.

I’m not sure that this kind of event has ever happened before in human history.

Though it’s sad that it took a disease to bring us together, it reminds me of how deeply connected we all are and how much our daily existence depends not just on our community, but on people we’ll never meet in far-flung corners of the world.

That very interconnectedness is what’s making this pandemic so dangerous to us and the economy.

Economists believe we entered a recession in March, and the latest data continues to show the economic damage:1

  • Retail sales dropped 8.7%, the biggest drop since the government started tracking the data in 1992.2
  • Spending on travel, restaurants, and shopping overall is way down (though grocery sales and delivery are up).3
  • The number of new unemployment claims skyrocketed to 22 million, erasing the job gains since June 2009.4

Despite the ugly economic data, stocks just wrapped their best performance in decades.5 What gives?

“Irrational exuberance,” to quote Alan Greenspan. Stocks are famous for rallying in the face of bad numbers, and it’s clear that investors are expecting government stimulus to lead to a quick recovery as states emerge from lockdown and business picks up.

Are bullish investors right? Will the economy recover quickly?

It’s impossible to say right now. How long the downturn lasts and how soon the economy recovers depend on answers to some critical questions:

  • When will widespread testing, tracing, and treatment allow lockdowns to ease? Reopening America too soon and igniting a fresh wave of the pandemic will prolong the pain.
  • Will employers maintain relationships with their laid-off staff? You can’t just flip a switch and reopen a closed business without skilled workers. The longer the shutdowns continue, the harder it will be for companies to staff up.
  • How soon will consumer spending return? “Deferred” demand that’s pent up and just waiting for restrictions to ease could cause spending to surge; “destroyed” demand that’s not coming back could cause spending to remain depressed for longer. Here’s a simple example: deferred demand would be rescheduling a canceled vacation. Destroyed demand would be deciding to skip it entirely.

V, W, L, or Swoosh?

The “shape” of the eventual recovery is being hotly debated because it gives us insight into what would need to happen (and how long it could take).6

“V-Shaped” Recovery: A short, sharp decline and then a quick rebound is the best-case scenario. In this case, lockdowns lift soon and spending surges, driven by pent-up demand and government stimulus.

“W-Shaped” Recovery: A “double-dip recession” is a worst-case scenario that could happen if the easing of restrictions leads to another wave of infections and lockdowns, or the economic damage causes a second downturn.

“L-Shaped” Recovery: An L represents a sudden plunge and fitful recovery if lockdowns continue through the year and growth is slow to return.

“Swoosh-Shaped” Recovery: A tick or swoosh is a sharp downturn followed by a gradual recovery as lockdowns are eased cautiously across the country.

We can’t predict what the road ahead will hold, but I think it’ll look less like a return to “normal” and more like a way to live with the way COVID-19 has overturned ordinary life.

What do you think? Will your life be back to normal this summer? Will we be riding waves in the warm Atlantic Ocean and romping down the Appalachian Trail relatively soon?

Be well,
Chris

 

Chris Mullis, Ph.D.
Founding Partner
NorthStar Capital Advisors

Financial Planning.
Wealth Management.
Since 2006

AskNorthStar.com
(704) 350-5028


P.S. Now that stimulus money is going out, the scam artists are slithering out to get their piece. Here’s what you need to know:

  • Scammers are impersonating the IRS and contacting folks by mail, email, phone, and text to ask for personal information.
  • The IRS is not contacting taxpayers about stimulus checks. If you receive a call from someone asking for information, hang up. Do not click links in emails or text messages purporting to be from the IRS or the Treasury Department. If someone asks you to pay an upfront fee or to confirm your bank details to receive stimulus money, it’s definitely a scam. Contact your bank or our office at (704) 350-5028 if you’re not sure.
  • Please share this information with those you love, especially parents, grandparents, and elders who may be at higher risk of being victimized.

1https://www.cnbc.com/2020/04/15/us-retail-sales-march-2020.html

2https://www.msn.com/en-us/money/markets/coronavirus-delivers-record-blow-to-u-s-retail-sales-in-march/ar-BB12FaEi

3https://www.nytimes.com/interactive/2020/04/11/business/economy/coronavirus-us-economy-spending.html

4https://finance.yahoo.com/news/coronavirus-covid-weekly-initial-jobless-claims-april-11-192401571.html

5https://www.wsj.com/articles/the-stock-market-is-ignoring-the-economy-11587160802

6https://www.weforum.org/agenda/2020/04/alphabet-soup-how-will-post-virus-economic-recovery-shape-up/
Practical advice (and Frodo’s lesson)
Nerd alert ahead. Practical tips to follow.

I think it’s safe to say that 2020 is not turning out like any of us expected or hoped. When difficult times are upon us, it’s the most human thing of all to wish it had all happened differently (or to someone else).

There’s a quote from the last Mullis family movie night that sums up the feeling pretty well.

In Tolkien’s The Lord of the Rings, Frodo (the unlikely hero) must lead a small group to overcome an extraordinary threat to the world (sound familiar?).

When he despairs of the dangerous journey ahead of him, Gandalf (the wise wizard) responds with a valuable lesson:

“I wish it need not have happened in my time,” said Frodo. “So do I,” said Gandalf, “and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.”


Click to view
I feel like Frodo some days. Wishing I didn’t live in such times. Do you?

But here we are. All we can do is decide what to do with what we can control.

We are in uncharted waters and it’s increasingly clear that this is an economic downturn that could rival the Great Recession in its severity.

I don’t say this to be alarmist, but to share the information we’re using to plan for our clients and help you use it effectively. The labor market is giving us a near real-time view of how the coronavirus is affecting the economy, and we can see that more disruption is likely as businesses lay off workers.


Behind each point in this chart are actual people who have lost their jobs or seen their income cut dramatically. Like the folks at The Crunkleton who make the best Old Fashioned in Charlotte, and the owner of the lovely hotel we stay at in Honolulu when we visit old friends in Hawai’i, and the workers on the production line at Carrier Corp. manufacturing heating and air conditioning equipment here in Charlotte.

They’re all real people facing income shortfalls and dreams deferred. While the shutdown is necessary to stem the tide of infection, it’s really going to hurt.

Fortunately, there are signs that coronavirus-related legislation (like the CARES Act) will help blunt the worst effects by giving support where it’s needed. And I think it’s likely that further aid will follow once policymakers see the depth and breadth of the economic damage.1

Now on to the practical advice you can use (and share) right now.

More layoffs and furloughs are coming. If you think you might lose your job or face a reduction in income in your family, let’s plan ahead for it and revisit your emergency funds and cash flow. The CARES Act opened up some additional options that we can discuss together.

RMDs have been waived for 2020. If you don’t need the cash this year, consider skipping the distribution or turning it into a Roth Conversion. If you already took some or all of your 2020 RMD after February 1st, you may be able to return it to your account as a rollover through July 15th (as long as you didn’t complete another rollover within the last 12 months).2 There’s some fine print to this, so please reach out if you’d like guidance.

Tax and IRA contribution deadlines have been extended to July 15th. The IRS extended the 2019 tax filing deadline for any taxpayer who had to file by April 15th. The extension also covers 2019 IRA contributions.3 Very important: if you’ll be making a last-minute 2019 contribution on your own, make sure the check or deposit is clearly marked 2019 to avoid an administrative error.

Stimulus checks will start arriving soon. If you had direct deposit information on your last tax filing, the IRS should send your check to your account. If you didn’t (or the account is closed), the check would go to the address the IRS has on file for you.

Small business owners should act fast on loans. The Paycheck Protection Program is offering forgivable, collateral-free loans through June 30, but the money is going quickly. SBA Express Loans and Economic Injury Disaster Loans are also options to consider.4 Though it’s not yet clear how long it will take to actually receive the loan funds, it’s smart to get your paperwork together and file quickly. Please reach out if you need help reviewing your options.

Some student loans can be deferred. Under the CARES Act, no payments are due on federally held loans through September 30th, and no interest will accrue. Unfortunately, private student loans (or those held by a lender other than the Department of Education) are not currently eligible.5 Very important: we’re seeing mixed information on whether payments will pause automatically, so check in with your servicer.

You could get more from Medicare. Medicare has made some important updates to its coverage due to the crisis. Telehealth benefits are expanded, so you may be able to see your doctors over the phone or online. Many plans have relaxed their definition of “in-network” providers, so it’s worth checking with your plan. Part D recipients can now request 90-day supplies of medication instead of the usual 30-day supply to help avoid trips to the pharmacy.6

We can’t control what happens next, but we can control some things: our choices, our behavior, and our mindset.

I’m no Gandalf, but I hope we can help lighten your load in these troubling times. I don’t know what the coming weeks and months will bring, but I do know this: we’re in it together. And we’ll get through it together.

If you’d like help acting on any of the tips above, or just want to talk through some strategic moves, please reach out. We’re here.

Be well,
Chris

 

Chris Mullis, Ph.D.
Founding Partner
NorthStar Capital Advisors

Financial Planning.
Wealth Management.
Since 2006

AskNorthStar.com
(704) 350-5028

1https://www.foxbusiness.com/economy/coronavirus-stimulus-cares-act-economic-impact

2https://www.financial-planning.com/news/cares-act-tax-relief-as-irs-says-some-rmds-can-be-undone

3https://www.schwab.com/resource-center/insights/content/tax-deadlines-extended-due-to-coronavirus

4https://www.sba.gov/funding-programs/loans/coronavirus-relief-options

5https://www.natlawreview.com/article/cares-act-relief-borrowers-eligible-federal-student-loans

6https://www.nytimes.com/2020/03/24/business/coronavirus-medicare-elderly.html

Chart source: https://www.cnbc.com/2020/04/03/this-chart-shows-which-industries-saw-big-job-losses-in-march-2020.html
https://www.epi.org/blog/nearly-20-million-jobs-lost-by-july-due-to-the-coronavirus/

 
This is why I’m an optimist

“The toilet paper had armed guards.”

“We celebrated my birthday with a dinner party over Zoom.”

“My officemate jumped on my desk and drooled on my keyboard during a meeting.”

One day, we’ll look back on these strange days and tell stories about the COVID-19 pandemic of 2020.

But right now, we’re getting through it. One day at a time.

How are you doing? What stories can you share with me about your life right now? Email me at chrismullis@nstarcapital.com and tell me. I’d love to hear about them.

In difficult times, it’s easy to think we are alone. Especially when our loved ones and support system are far away or reduced to virtual connections.

We are all learning how to adjust to a new world and stay grounded when headlines are blaring and our very health and well-being are under threat.

I’m working on being grateful for the great things in this life.

I’m grateful for my wife.

I’m grateful for our children.

I’m grateful for our family, friends, and neighbors.

I’m grateful for work that allows me to help people in my community get through times like these.

I’m grateful for you.

What are you grateful for?

Like WWII and 9/11, we’re living through days that will define future generations and change the very fabric of our society.

I don’t envy the policymakers making grim trade-offs between life, death, and the economy. How long do we socially distance? What about the 10 million+ who have lost jobs?1 Or the businesses that have been forced to close?

I hope with all my heart that each one of them has a financial plan and someone they can go to for advice. But my head knows better. I know that most Americans can’t survive a $1,000 emergency and only 17% have a financial adviser to help them.2

What trade-offs are we willing to make to protect those at greatest risk from the disease? We can’t put a dollar figure on human life. But we can put a dollar figure on the human cost of jobs lost and businesses closed.

The next few weeks are going to be tough for all of us. And I want you to know that I’m here for you.

Layoffs and furloughs are happening and I’m helping affected clients create a game plan to get through the next few months. If this happens to you or someone you love, please let me know immediately so I can help you determine if you’re eligible for special assistance. And, also please remember our COVID-19 pro bono program that we’ve launched to serve people who don’t normally have access to fiduciary advice.

How do we make good decisions with so much uncertainty and mixed information?

We make a choice:

We can choose to crumble under the weight of fear and uncertainty…

We can choose to simply hunker down and endure…

We can choose to grow, flourish, and come out stronger on the other side. We can be grateful for our blessings and focus on what’s within our control: our mindset, our behavior, and the actions we take.

I am fundamentally optimistic about humankind’s ability to weather this crisis and use it to grow.

I’m optimistic about how our society will adapt and change due to this crisis. Some of the greatest changes and innovations in history grew out of frightening, pessimistic times.

I’m optimistic about the heroes fighting the disease on the front lines.

I’m optimistic about the people helping friends, neighbors, and strangers stay safe and comfortable.

I’m optimistic that those with jobs will continue working to keep this country going while we wait and heal.

I’m optimistic about the innovators staying up late in labs, workshops, factories, and offices around the world to create vaccines, treatments, and tools to beat the virus.

I’m optimistic about the new inventions and technologies that will grow out of necessity.

I don’t know what challenges the world will throw at us in the coming days and weeks. I do know that I am grateful to be surrounded by smart, motivated people who push me to do better.

How can you show up for the people around you? How can you be your best self in these times?

How can I help you do it? Email or call and let me know.

Be safe and be well,
Chris

Chris Mullis, Ph.D.
Founding Partner
NorthStar Capital AdvisorsFinancial Planning.
Wealth Management.
Since 2006

AskNorthStar.com
(704) 350-5028

1https://www.marketwatch.com/story/the-us-officially-lost-701000-jobs-in-march-but-in-reality-millions-vanished-2020-04-03

2https://www.bankrate.com/banking/savings/financial-security-january-2019/
https://www.cnbc.com/2019/04/01/when-it-comes-to-their-financial-future-most-americans-are-winging-it.html

 
WCCB TV Interviews Dr. Chris Mullis

Source: WCCB TV / Local Financial Advisors Say “Stay the Course” Following Historic Market Drop

Dr. Chris Mullis,  NorthStar’s Founding Partner, did an on-air interview with WCCB TV news anchor Drew Bollea discussing how people should think about their investments in the midst of a global panic induced by the coronavirus. (click image to watch video)

Ironically, this interview was recorded on March 9, 2020 — exactly 11 years to the day since the crescendo of global panic that marked the bottom of the 2007-09 bear market.


Here’s the memo that we sent clients and friends ahead of this interview that elaborates on the points made during the news report: 

March 9, 2020

At this morning’s opening level of 2,764, the S&P 500 is down over 18% from its all-time high, recorded on February 19. Declines of that magnitude are fairly common occurrences — indeed the average annual drawdown from a peak to a trough since 1980 is close to 14%. But such a decline in barely a month is noteworthy, not for its depth but for its suddenness.

As we all know by now, the precipitants of this decline have been (a) the outbreak of a new strain of virus, the extent of which can’t be predicted, (b) the economic impact of that outbreak, which is equally unknown, and (c) most recently, the onset of a price war in oil. (That last one is surely a problem for everyone involved in the production of oil, but it’s a boon to those of us who consume it.)

The common thread here is unknowability: we simply don’t know where, when or how these phenomena will play out. And in my experience, the thing in this world that markets hate and fear the most is uncertainty. We have no control over the uncertainty; we can and should have perfect control over how we respond to it.

Or, ideally, how we don’t respond. Because the last thing in the world that long-term, goal-focused investors like us do when the whole world is selling is — you guessed it again — sell. Indeed, I welcome your inquiries around the issue of putting cash to work along in here.

On March 3, the erudite billionaire investor Howard Marks wrote, “It would be a lot to accept that the US business world — and the cash flows it will produce in the future — are worth 13% less today than they were on February 19.” How much more true this observation must be a week later, when they’re down 18%.

Be of good cheer. This too shall pass.

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