The Legacy Perspective – July 2020

by  Steve Wachs, CFP®

Impeachment, U.K. officially withdrawals from the European Union, US/Iran on the brink of war, Australian bushfires, the death of Kobe Bryant, Hong Kong protests, the Democratic presidential candidate debates, and George Floyd is killed are just some of the events that have occurred so far this year. Did I mention a global pandemic called COVID-19 that has led to the death of thousands, economic shutdowns, physical separation of families, numerous events cancelled, and a level of fear that continues to emanate across households around the world? No wonder a myriad of emotions and feelings have left many of us a little tired.

For long-term readers of The Legacy Perspective (all 3 of you), you know one of our consistent mantras is to “not let emotions dictate actions when dealing with financial markets.” Acting on feelings ranging from fear to greed can lead to disastrous investment outcomes. That doesn’t mean we have not taken action. In fact, we discussed in the last perspective using our disciplined process that involved stabilizing the portfolio and taking advantage of both short-term and long-term opportunities. Using a sports metaphor, we have played both offense and some defense given the volatility of the financial markets. In addition to the healthcare and high yield sectors that we added, you may have seen the purchase of a biotech ETF investment given the rewards that will come from finding a solution to the coronavirus. We introduced a hedged equity fund along with “buffered ETF’s” to many portfolios that should help to reduce downside risk. For portfolios that hold individual stocks, some positions have been sold as they increased in value and hit price targets, and with the proceeds, other companies were purchased that we believe have more upside potential.

Prudent investment actions are required when we have gone through cycles in both the equity and fixed income investment markets that typically occurs over much longer periods of time. We went through the worst first quarter return in stock market history followed by the best return since 1998 in the second quarter. During the first phase (February 19 to March 23), a bear market reared its ugly head with all industry sectors in negative territory. The recovery phase (March 23 to June 8) saw both fixed income and equity markets soar as the Federal Reserve took dramatic action. The consolidation phase (June 8 to June 30) has seen the technology and consumer discretionary sectors hold their values, while the energy and financial sectors declined.


Performance of the S&P 500 Index and select industry sectors through the first half 2020

On February 26th,  we shared the following with you that was titled “What We Know.” Coronavirus had just entered our vernacular.

“We actively diversify your investment portfolio for these specific circumstances. By not having all your money invested into stocks, we know your portfolio will decline less during times like these. Second, if you are withdrawing money from your portfolio, we took advantage of gains last year and your “paycheck” for the rest of this year and into next year is protected from declines. If you are adding to your investment portfolio, these temporary declines are opportunities to add to good companies that can provide nice long-term returns.”

As we have outlined above, a lot has happened, and continues to happen since that was written. However, all of “What We Know” is still absolutely true. We wish we could outline what will happen in the next 6 months. We could sound really smart, and we might actually be right. However, you do not want your financial independence to be determined by our ability to guess the future.

On a final note, please reach out to Jennifer, Roger, Matt or me if you want to discuss the details of your specific situation. One client mentioned she didn’t want to “bother us” as we must be really busy with phone calls. It is rare we are sitting around not doing anything, but please know we are never too busy to respond to any questions you may have or just visit if you need to interact with someone else other than the person you may have spent way too much time with over the past 4 months. Truly, one of the best parts of the week is our Monday morning team meeting when, as a group, we share our client interactions from the previous week.


  • Legacy Consulting Group is registered as an investment adviser with the SEC and only conducts business in states where it is properly registered or is excluded from registration requirements. Registration is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability.
  • Information presented is believed to be current. It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. You should consult with a professional advisor before implementing any strategies discussed.
  • All investments and strategies have the potential for profit or loss. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that an investor’s portfolio will match or exceed any particular benchmark.
  • Historical performance returns for investment indexes and/or categories, usually do not deduct transaction and/or custodial charges or an advisory fee, which would decrease historical performance results.


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