Vice President at JP Morgan Asset Management
Managing Director at JP Morgan Asset Management
Client Advisor at Neuberger Berman
Welcome to Season 1, Episode 5 of Meet the Expert® with Elliot Kallen!
In this episode, Elliot is bringing on Brendan Coyne, Bob Fields, and Patrick Gallegher to discuss market updates, how to navigate the rebound, and the Family Love Letter program.
The best way to cushion yourself from the downside is to be thoughtfully diversified.
vice president, jp morgan asset management
2020 is certainly going to be looked at as the year of the COVID-19 recession. It’s also a time where you want to position for a very rapid recovery. The best way to cushion yourself from the downside is to be thoughtfully diversified. You want to be positioned for recession, but also prepare for the recovery.
We shut down this economy like a light switch, and we’re going to have to turn it on with a dimmer switch. That is to say, it’s easy to shut down the economy but much more challenging to turn it on.
This recession will likely last 12 to 15 months. Traditionally, there are three main factors that have caused past recessions:
- High inflation or unforeseen inflation. We have very low inflation.
- An aggressive Federal Reserve trying to cool down an overheating calm economy. In fact, the Fed has pushed that overnight Fed Funds rate to essentially zero, and they’ve been very proactive in making sure that the bond markets are liquid.
- Extreme valuations. Right now, the stock market is undervalued. There’s a lot of volatility in the stock market and we expect that to continue.
There’s a reason why your well-diversified portfolio includes equities: you own that high-quality core that, over the long run, is negatively correlated to stocks so that when stocks go down, those high-quality bonds are going to go up in value.
managing director, jp morgan asset management
70 percent of U.S. GDP is based on consumer spending. Consumption has dropped dramatically with the shelter-in-place environment.
Usually, in times of panic, investors left to their own devices tend to sell when the market is distressed. They tend to invest when they’re feeling a lot better about things. With proper asset allocation, when the market goes down 34% as it did in March, you’ll only be down half or a third as much.
There’s a reason why your well-diversified portfolio includes equities: you own that high-quality core that, over the long run, is negatively correlated to stocks so that when stocks go down, those high-quality bonds are going to go up in value. High-quality bonds will lower your overall volatility. Those correlations play a very important role in overall diversification.
At Prosperity Financial Group, we want to caution you against making investment decisions based upon fear or panic because you tend to miss out on the upside. Instead, we want to help you pick up swaths of wonderful investments at the right time at the right price.
Estate planning is a difficult but incredibly necessary conversation. Inevitably, one spouse will die first. Can the surviving spouse take care of themselves?
client advisor, neuberger berman
The Family Love Letter Program came about when One of the creators, a state attorney in Atlanta, Georgia, underwent the difficult passing of his father, a WWII veteran. His father made a tremendous last-minute request—to be buried at Arlington National Cemetery—which he’d never voiced previously. Nother creator had a friend who suddenly became widowed with two children and two stepchildren, as well as a family-owned business—and an unsigned will and trust.
This was the genesis of the Surviving Spouse Checklist. It’s not just a timeline, but also a checklist, of what you should be doing to help yourself and your family immediately after your passing. The Family Love Letter makes sure that everyone’s wishes and needs are fulfilled and accounted for.
Estate planning is a difficult but incredibly necessary conversation. Inevitably, one spouse will die first. Can the surviving spouse take care of themselves? It’s wise to consider safeguards like life insurance, which can help with paying off the mortgage, putting the kids through college, and taking care of estate taxes.
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DISCLAIMER: Prosperity Financial Group and Meet the Expert® with Elliot Kallen do not make specific investment recommendations on Meet the Expert® with Elliot Kallen or in any public media. Any specific mentions of funds or investments are strictly for illustrative purposes only and should not be taken as investment advice or acted upon by individual investors. The opinions expressed in this episode are those of the Meet the Expert® with Elliot Kallen guests, and not necessarily of Elliot Kallen or Prosperity Financial Group.