Apprise Wealth Management's Selected Readings for the Week of April 26, 2020

Personal Finance

April 30, 2020
Personal Finance

I hope everyone is staying both healthy and safe. There are many unanswered questions about what the next steps in dealing with coronavirus should be. These are not easy decisions. In our house, one of my sons and I are the designated shoppers. We get up early on Saturday morning and spend a couple of hours doing our shopping for the week. This week’s first article addresses some of the concerns that come from leaving our homes. If you own pets and their behavior seems a bit off, you may appreciate the second article.

If you have any friends that are nervous and do not have an advisor or whose advisor is not reaching out to them, feel free to have them give me a call. I’m happy to spend 15 or 20 minutes answering their questions, no-obligation because they are a friend of yours.

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Click here for a video overview of this week’s content.

Here are the links to this week’s articles as well as a brief description of each:

1. Is the Virus on My Clothes? My Shoes? My Hair? My Newspaper? If you go out, are you concerned that you could be tracking the virus into your homes? Do you wonder if it’s on your clothes, your shoes, the mail, or even the newspaper? This article shares the opinions of infectious disease experts, aerosol scientists, and microbiologists about these risks. While we should still take precautions, I hope you find their answers reassuring.

2. Why Your Pet Is Acting Like a Weirdo During Quarantine, Explained by Animal Behaviorists. Do you have pets? Are they behaving differently while you’re quarantined at home? We own two Shih Tzus. When I’m working at home, they spend a lot of time in my office. Most of the time, they sit apart. Lately, they lie together much more often. (Click here to see a picture.) We don’t know if our being quarantined is making our pets feel anxious. But they may exhibit “displacement behaviors.” In other words, our pets may adopt tics to cope with new stressors. How? Perhaps, they act differently because they perceive and react to our stress.

3. More Thoughts on the Worst Case Scenario for Diversified Portfolios. Asset diversification can help reduce your portfolio’s volatility. In general, higher allocations to stocks increase a portfolio’s potential return. But, the risk of loss also increases. According to the data presented in this article, a portfolio allocated 50% to the S&P 500 Index and 50% to 5-year Treasuries has never lost money over rolling 10-year periods dating back to 1926. A 75%/25% allocation resulted in a loss 1% of the time. Investing only in the S&P 500 resulted in negative annual returns about 5% of the time.

4. America’s Food Supply Chain Moves Backward. In my last two weekly blogs, I shared articles discussing the effects of quarantine on the availability of toilet paper and certain food items. Did you know some restaurants are selling groceries alongside prepared food? These changes to better accommodate our needs during the pandemic are encouraging.

5. Backdoor Roth IRA: What It Is and How to Set One Up. Roth IRAs can play an important role in your retirement portfolio. While you pay taxes on amounts contributed to a Roth IRA today, you will not pay taxes when withdrawing these funds during retirement. If your income exceeds the allowable amount ($196,000 for those filing joint returns), consider a backdoor Roth IRA. The process lets you convert your traditional IRA to a Roth IRA regardless of your income level. You can fund a backdoor Roth without paying any taxes on the contribution. If you’re not sure how, please send an email to philweiss@apprisewealth.com.

If you need a pep talk or to discuss your investment strategy, please schedule a call or reply to this email. I'm here for you and happy to talk.

P.S. There has been an increase in coronavirus-related phishing and identity theft scams. Please be on alert for “official-looking” emails asking you to open an attachment or click a link to read an official statement – they may contain malware. If you get a suspicious email, check the sender’s name and email address to make sure they’re not fake. When in doubt, delete the email. Do you have someone in your life who you think might be at greater risk of email scams? Forward this to them so they're aware.

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