COVID-19 is the hot topic in the news right now, and in this special episode we give our own take on the situation. There’s no special guest today, but we do think this episode is needed amid the chaos out there in the world.
Specifically, we take time to reflect on other hard times in the past and discuss how we got through them, along with speculating what the future may hold.
Most importantly, we take time to discuss how you should be handling your finances during this unstable and unsettling time. We’ll also chat about:
The importance of not keeping all your money in one place
Your COVID-19 financial action plan
Why trying to time the market is typically not the best idea
How to find help and ask for it if you need it
Listen now…
Transcript
Steve Gordon: Welcome to the Secure Retirement Podcast. My name is Steve Gordon. I am here with your regular host, John Curry. And John, welcome. Excited to be here. It's a, we're in some challenging and uncertain times but always good to see your face here across the Zoom screen, the way we're now all meeting across the world.
John Curry: It seems like today, more and more people will be using Zoom. I hear people all the time now talking about it. I say oh, well that's great. We've been using it for quite a while. Been doing conferencing like this for at least two and a half years. Actually longer than that. April moved to Jacksonville two years ago. So out of necessity, we started doing it more often like daily.
Steve: Yeah. It's fantastic technology. I'm so grateful that we have it. We're certainly living in different and newly challenging times. I was reflecting with my wife a couple of days ago, just trying to imagine what this would have been like a decade ago. And we're very well equipped to be able to continue to operate now.
So I'm thankful for that and I'm glad I can see you today. So today we're going to talk about I guess some things that have been on your mind around what's happening with the economy, with the coronavirus, all that sort of stuff. Can you kind of kick us off and just give us a little bit of your perspective? You know, you've stayed amazingly calm through all this and I know that's a lot of just the way you are, but it comes from experience. So help us.
John’s Take On the Current Situation
John: Well, let me do my best. I like to think of this as what do you do in uncertain times. I started in September of 1975. And to set the stage, that was right after the oil embargo. I remember coming back from Thailand in 1974, had to wait in line for an hour and a half to get a ration of five gallons of gasoline. That was 1974. I came back in April from Thailand and got out of the Air Force in October of 74. And the economy was in pretty bad shape in 73, 74. And in 75, I came into the business, people still reeling from that.
So we had the oil embargo in the 70s and the market was misbehaving then. Then move forward to the 80s, 1987. What happened? We had the biggest market crash since the Great Depression. People were panicking. But the people who stayed the course did very well. Then 1990s, I remember 1994 buying a house, My plan, Steve, was to take money out of my mutual funds for the down payment. Well, the market was bad. Had I taken the money out, I'd have a permanent loss.
So instead, I borrowed on my life insurance cash values, used that money for the closing and downpayment. And then when the market came back then I think cashed in some of the mutual funds and paid my loan back. And one nice thing about life insurance cash values by way, they never have a bad day. When the market's down it does not impact my cash values. More on that later. Then go to the 2000s, 2000, 2001, 2002, double-digit losses in the market three years running.
And people were being told stay the course, stay the course, stay the course. And the people who did, did just fine. But maybe you couldn't stay the course. What if you just entered retirement, had to take money out? That's what a lot of people were doing with their IRAs. They were being forced to take money out of their IRAs in a down market. And in 2001, Congress and Department of Treasury put their heads together and said, okay, we need to change the amount that people are being forced to take out of retirement accounts.
So they raised the divisor from 16 to 24. Excuse me, 27, 24. So that meant you took out less. So why do they do that? Because if you're taking money out of your accounts in a down market, it's almost impossible to recover because you're already lost money, you're taking it out, it has no chance to grow. Then you take a look at 2008 with what they call the Great Recession. Again, people were hurt. And not just in the market, real estate, everything was collapsing.
And people were very fearful. Just think back to 2001 how bad it was. Planes weren't flying, everything was shut down. So when people ask me, John, how in the world can you be so calm with what's happening with the market in the last few days? And I just smile and I say, Well, because I've been there before. This is not my first rodeo. And we've all been through it. I'm 67 years old so if you're my age, you've experienced the same things. Maybe not as directly because I'm seeing clients every day dealing with this.
And now here we are in 2020 and we have this thing called the coronavirus and the impact it has had on shutting things down. In a lot of ways, Steve, it just reminds me of what we experienced in 2008. But if you look back at the last 10 or 11 years, we've had a bull market. The market did the best that it's ever done. Now we've lost a lot of those games, if not all of it in the last few days. Just this morning, I was looking at three of my accounts. One's an investment account. It's down 30%. 30% in the last three weeks.
Okay, am I going to panic and move that money? No. It's staying right there. In a few minutes, we'll get into how I can have that calmness and maintain that plan of action. My two annuities down, but if I want income to start now the income is guaranteed. So my two accounts that are in the market, but I have guarantees wrapped around those things so that I have guaranteed streams of income if I chose to turn them on right now. And already mentioned my life insurance cash values earlier. My cash values give me the peace of mind and the power of knowing that I have money sitting there that's guaranteed.
So I don't have to worry about that. And I like that. Then we teach and preach, don't spend all your money, don't invest all your money. Keep some in liquid savings. So, frankly, I can remain calm because I know that I've got money set aside that's earmarked for retirement. I've got money set aside for emergency funds. And I have my life insurance in place to take care of my family. So it allows me to do things differently than some people who just invest only and don't plan.
Steve: I appreciate you sharing that perspective. We've been through this before. If not this exact circumstance, we've been through some scary times before. Yeah, I was three years old in 1974.
John: Thank you for that. Yeah, I appreciate you letting me know that young man.
Steve: Well, I'm, and I'm not sure that for that reason. I do remember sitting in gas lines with my parents. And I don't think I remember them being worried and aggravated. It was not a fun time, but I don't remember much more than that about it. And, you know, as you were describing that, you know, senior thinking, what would it be like today if we were rationing gasoline? It'd be a very different situation. We're not there now. Could we get to that point?
Maybe. I doubt it. I don't think that's where we're going here, but it kind of puts this into perspective that we've been in some challenging times before. Some very difficult times before and yet we've recovered, we've moved on. Life still goes on. And I think taking a moment to kind of put that into perspective is actually helpful right now because it's very easy to look at what's going on around us when it feels like, you know, there's another shoe dropping every minute and get really anxious and worried.
Have a Plan in Place
John: Well, you're correct in that. And I'll just kind of add a little bit of levity to this. I remember a funny thing. I remember one of the times I'm in line to buy gas is Seymour Johnson Air Force Base in North Carolina and I ran out of gas 15 feet from the pump.And had to get some guys help me push my car. They were, of course, willing to because I was holding them up behind me. But 15 feet from the gas pump had to push me up there to get more gas. And back then I was driving in 1960 Ford Fairlane 500. It was a straight six-cylinder so it didn't burn much gas. How things change, right?
Steve: Yeah, well, were you laughing about that at the time?
John: Oh, I was mad as hell. I wasn't laughing at all. There was no laughter at all. That's why I'm laughing now. I've laughed many times since then. But on a serious note, let's just talk about what's happening. What's happening is we, all of us are somewhat guilty of this. I think I told you earlier today I was watching television yesterday. I wanted to see what was happening with the markets and also the latest on the coronavirus and you and I made a comment kiddingly about I could never fully retire. That's true. If I had to sit around all day long watching that stuff on television, I don't know what to do.
I think I'd just be a basket case because you hear one person saying something that's like fearful and another talking about that creates chaos. The bottom line is you have to have an action plan. And if you don't have your own plan, guess what? Someone's got one for you. And it's probably not the one you want. So I'm going to give a piece of advice right here. Whether it's me or somebody on my team, if you're listening to this and you're uncertain about what to do, don't do anything until you talk with someone you can trust and tell the truth, the whole truth, nothing but the truth.
Lay all of your stuff on the table and make sound decisions because the planning we do, we tell people every day, it's designed to make sure it works under all circumstances, positive and negative. Tax increases, tax decreases, inflation, no inflation, market gains market losses, you cannot have all of your money in one place. And I've already alluded to some of the things that I'm doing and have done over the years to make sure that I'm well-diversified.
Because I want to be in a position that if we see, not if, when we see it leveling out a little bit, then it's time to invest. But what does human nature tell us? When the market's going up, we want to jump in and buy. When the market's going down we panic and sell. If you go to the grocery store and they got a big sale on tuna and they got an extra big truckload and you like tuna, what are you gonna do? You're gonna load up your basket with tuna because it's on sale. Likewise, if you go back two days later, and they've doubled the price of tuna you're probably gonna say nah, I don't need it. We don't think that way with investments.
And I cannot do investment funding for someone over the telephone or through a webinar or seminars. they, hey, this was one size fits all planning. Can't do that. If I were willing to give up my securities license and become an infotainer and have a TV show or radio show, I guess I could do that. But the regulators and the company compliance folks would not be happy with me if I did something like that. So I would tell you that you want to listen to this, if you want help, find someone whether it be me and my team or someone like us that can guide you and help you. But I would say this, don't panic.
And if you're not sure of what to do, maybe you should just do nothing and wait it out because history shows that if you just leave things as they are, it's been well. The only exception I would make to that is if you need income and you're starting income right now and you're being forced to take income out of your accounts while the market is down, that will hurt you. So that's, to me, the action plan is stop and reassess where you are. Do you have enough money for liquid purposes? What does that mean? For emergencies, opportunities when there's a buying opportunity will you do it? I heard people yesterday giving advice.
Hey, now's the time to buy stock because it's down. That there are certain companies if there's stock you'd like to own now's the time to do it. Others would say no, we don't think we've reached the bottom yet. I don't know. And the reality is I don't think anyone really knows. So we just have to wait and see. If you're adventurous, maybe start buying some now. If you're not so adventurous, maybe you wait. Maybe you wait. The number one is I like to tell people don't panic.
We like to use the phrase be prepared, not scared. And if you prepare, a good example, yesterday, I spoke with three different clients over the telephone. And they were never not in a panic mode, but they wanted to be reassured and I was able to tell all three of them the money that we set aside for your retirement is protected. Your account balance will be down like your other investments, but the income will not go down. And that's key. You know, I like the fact that my checks pop up every month. They're guaranteed checks the rest of my lifetime.
I like that. I like that. And, you know, so what's the money for? Is that retirement income? Is it to grow for the future? Some of the money I have is down 30%. Yeah, mostly people would not want to invest as aggressively as I did with that bucket of money. But that particular bucket of money, I don't need it today. I don't need income from it today. So I'm willing to ride that out. My more serious money for retirement income purposes, I got news for you, it's not invested as aggressively and nor should yours be.
Steve: As folks are kind of navigating this over the coming weeks and they're looking for that help, looking for somebody to connect with, you know, what's the best way for them to reach out to you and your team right now?
John: Well, I tell people, it's always easier to start with a telephone call. You take 20, 30 minutes over a telephone, you don't have to get in a car and drive anywhere, especially with everybody wanting to self-quarantine, that's probably the best way to do it. They can reach me by email at john_curry@glic GLIC dot com. John_curry@glic.com. Or at our office 850-562-3000. 850-562-3000.
And just schedule an appointment. Be happy to help anybody if we can. But the key really is just sit down and reassess where you are. And don't get panicky. Just say okay, what do I have in checking account, savings account, my investments, retirement? You know, just start asking yourself, what do I want for the future? I have found, Steve, that over these years, I'm not going back these four decades that we talked about earlier. You take a look at it, five decades, take a look at it, there's plenty of opportunities. Yeah, there's losses today but there's also a lot of money being made today.
We talked about Zoom, we're doing a meeting on Zoom right now, talking to each other recording this. I was watching the CEO being interviewed yesterday. In fact, let me just turn back to my news. Their stock price yesterday was up 7.61%. You know, and the price of the stock was 118. And I'm not recommending anybody buy the stock because I don't recommend individual stocks at all.
I don't consider myself to be a stock analyst. But that's just a good example of where there's opportunity because people are staying home, being told to go home and work. The gentleman who is the CEO of Hormel Foods yesterday was being interviewed. They're doing well. You know, so just because the market's down doesn't mean everything's down. And I would caution people to be aware of that just, you know, again, don't panic and don't get scared, just get prepared.
Steve: I haven't been through as many of these cycles as you have but the thing that I've found through all of them and this doesn't apply specifically to the stock market, I just find this in general is as we go through these times, the opportunity doesn't disappear, it just moves. And there are really two moves that it makes. There's the move during the crisis or the challenge or, you know, the short term periods. So you're gonna see stocks like that go up in the short term because there's a lot of demand for them right away.
You're gonna see businesses and parts of the economy that are, you know, people are moving to benefit and you're gonna see other parts of them not. And then there's going to be the longer term. When things begin to settle out and you're going to see that some things are new and different and there are new opportunities. There always are. There's always a bigger, brighter future after these. And you can't point to a time in human history where that wasn't true.
Opportunity Emerges From Chaos
John: Well, you're correct. And one thing I've done over my 45-year career, I have resisted the urge, totally resisted to get into selling and trying to time the market. I don't do that. If you came to me and said I've got money to invest, I want you to help me time the market, I would decline. I'd say no, I don't do that. If you want to put some money in today and do it in layers, I'll be happy to help you but as far as me telling you when to buy and sell in the market, I don't do that. And I've had people say well, wait a minute, I thought you were a stockbroker. Nope. I'm licensed to sell stocks but I do the planning first.
And I'm to the point where, Steve, I'm so adamant about this, that somebody comes in says here, here's some money to invest, if you're not willing to share with me what your plan is and your goals or objectives, I don't even want you as a client. Why would I take on that risk? Because then if you lose money, guess who you're going to blame. You'll blame me, not yourself. So we're just to the point of where we say, Let's sit down together, have a conversation, start by phone, do it face to face, whatever is best and then once we're clear that we can provide the service, we'll help you. Otherwise, it's okay.
There's no hard feelings. Now, when I was younger did I do that? Oh, heck, no. You know, 1975 when I started, you know, whatever you want me to do for you, I would do it as long as it's legally morally and ethically right. And then I've learned over the years the best clients are the ones who want to learn, they want to be coached, they want some leadership, they want some guidance. They're not just looking hey, here's my money. Do something with it.
Steve: Yeah, I get that. I get that. So, again, if you'll share with folks how to get in touch with you if they've got questions, if, you know, if they're worried and they just want a reassuring voice to talk to about their situation, how can they get in touch with you and your team?
John: Well, the best way is to schedule a telephone appointment. If they would like to come in face to face, they can do that. But I'll give the phone number first, 850-562-3000. 850-562-3000. Or they can send me an email at John JOHN underscore Curry, CURRYat Glic GLIC dot com. And we'll be happy to help if we can.
And that I will also want to throw something out there as a word of caution that is that we will not give specific advice until we have the details. So if you're calling and you just want to be reassured about what you've got, clients, we can do that for. If you're someone who's brand new, please understand, we can't advise you unless we have all the facts and the details. And I think anyone who tries to give you advice without having all the details is not practicing proper planning.
Professionalism in my opinion. But I can't speak for other people, I can only speak for John Curry and his team. Because those are the people I have to report to and be responsible for. And also our company, which is Guardian and Park Avenue Securities. And all the disclosures that follow this will be explained who those companies are because we're highly regulated folks so we have to do things just right. Or we can't do them.
Steve: Well, very good, John. Thanks for sharing a little bit of your perspective today. And folks, thanks for tuning in and listening. Stay safe and stay healthy.
John: Very good. Thank you, Steve.
Voiceover: If you'd like to know more about John Curry's services, you can request a complimentary information package by visiting johnhcurry.com/podcast. Again, that is johnhcurry.com/podcast. Or you can call his office at 850-562-3000. Again, that is 850-562-3000. John H. Curry chartered life underwriter, chartered financial consultant, accredited estate planner, masters in science and financial services, certified in long-term care, registered representative and financial advisor at Park Avenue Securities LLC.
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