240 South Pineapple Avenue, Suite 200  Sarasota, Florida  34236

You can find reports from our Investment and Research team, timely and informative financial planning topics from our Wealth Management team, and deeper dives on various important topics in our white papers from any team member. Read online, share with friends, or download for your convenience.

Children, Grandchildren and/or Great-Grandchildren of Allegiant Clients are Eligible and Encouraged to Apply to Annual Scholarship Program

Allegiant Private Advisors gives back to the community in many ways, and there is a particular focus on education and children among our staff. We also believe that the most important thing to our clients is the health and well-being of their family. Our scholarship program is particularly designed to heighten the awareness of personal financial planning and fiscal responsibility for graduating high school seniors. What better way to help your children focus on their own financial success.
Eligibility: The scholarship is available to any graduating high school or currently-enrolled college student who is a child, grandchild and/or great-grandchild of a current client. The high school student must have plans to attend any post-secondary educational institution. The scholarship will be awarded directly to the student in the amount of $1,500.
Application Process: Student must satisfactorily complete the following:
  • An application. 
  • A 350-word essay on “What is personal financial responsibility?”
  • A current academic record, a list of recent community service work, extracurricular activities, and work experience.  
**All of these are required for the application to be considered**
The Selection Process: An Advisory Committee will review the entire application.  All applicants’ names will be removed from the selection process to insure objectivity. Employees and families of Allegiant Private Advisors and Kerkering Barberio, CPA are not eligible for the scholarship.
Distribution: The Scholarship will be paid directly to the award recipient. This scholarship is not needs-based.
We are delighted to offer this benefit for our clients. If you would like more information, please contact our office.
The deadline for receipt of application is April 30, 2020.
The final award will be made by June 15, 2020.

It is our goal to continuously enhance the long-term relationships we have with our clients and their family members. We hope you will encourage eligible family members to participate in this opportunity.

Please feel free to contact our office if you have any questions about the scholarship program: (941) 365-3745.

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law. The CARES Act has been enacted as a direct response to the COVID-19 pandemic and is intended to provide immediate and ongoing economic relief to individuals and businesses affected by the crisis.

Click here to view a summary of these key provisions relating specifically to individuals and small businesses.

Key components include direct payments of $1,200 to adults and $500 to children for qualifying households, removing the required minimum distribution (RMD) requirement for 2020, increasing the unemployment insurance benefit, eliminating required payments on certain student loans, and numerous provisions to support small businesses and self-employed individuals.

The stock market breached the down 30% threshold this past week for just the sixth time during the last 50 years. As the Coronavirus has upended our way of living and shut down large swaths of our economy, the odds of a global recession have increased dramatically. Facing these unprecedented levels of uncertainty, many investors are wondering if now is the time to call it quits and go to cash. As Mark Twain is credited with saying, “History doesn’t repeat itself, but it often rhymes.” So, Luke Nicholas, CFA, CFP®, our Director of Portfolio Management and a Principal at Allegiant Private Advisors, decided to dive in and review the other historical instances of 30% corrections and see what market returns looked like after each of those 30% drawdowns. 

The Allegiant team has been in touch with you often over the past few weeks, but I’d like to touch base on behalf of everyone at the office to talk about things that we are doing on your behalf and things that you may want to consider.  Many of you that we have spoken with feel confident that you are in a good position to move forward and it is great to hear that.  Others have been nervous or said that you were “fine.”  We all know what “fine” can stand for though!  While it is not a comfortable feeling, it is totally normal to feel this way during times of uncertainty, like we are currently in.  

Please remember that the Allegiant team remains fully available to connect with you virtually, via phone, email or online meeting portals – whatever method works best for you. Staying connected to your trusted advisors and talking with us is probably one of the best things that you can do right now.  Let me detail a few strategies that you can use, as well as other ways that we are working on your behalf.  

It is in Allegiant’s DNA to provide the highest level of service and commitment to clients, especially during these more trying times. With that in mind, we would like to remind you, as of Friday, March 20, the U.S. government has decided to postpone the April 15 tax-filing and tax-payment deadline by 90 days, pushing the new effective deadline to July 15, 2020.

Equity markets can be volatile, a general rule that sounds like the understatement of the moment. Since the beginning of March, the S&P 500 has had daily movements of more than 4% in 11 out of 15 trading days. With markets experiencing extreme volatility it is important to review one of the most fundamental best practices of portfolio management. 

Rebalancing 101

The primary function of rebalancing portfolios is to control risk, but effective rebalancing can also help to increase average annual returns of a balanced portfolio over its lifetime.

At Allegiant, we regularly rebalance client portfolios. But what does this mean? Specifically, this means over the last few years we have been taking profits in equities and rebalancing into bonds. In years like 2019, selling out of stocks seemed like a bad decision. Fast forward to today and our disciplined rebalancing strategy played a very important role in reducing downside risk. 

Tactical Weightings

Rebalancing to the model is the first step, the second step is implementing tactical asset allocation decisions. Allegiant manages portfolios both strategically and tactically, utilizing under-weight, equal-weight, or over-weight allocations. For example, a target equal-weighted 60% equity/40% fixed income portfolio could be over-weight equities (65%/35%) or under-weight equities (55%/45%). For years coming out of the last recession, Allegiant ran model portfolios over-weight equities. In 2018 we moved back to our strategic equal-weight target allocation and earlier this year tactically moved to under-weight equities. 

These somewhat minor tilts in allocations can make a significant difference. Today, as markets experience the fastest decline from a market top to a bear market in history, we take comfort in our tactically under-weight equity portfolios. 

While our model allocations are already under-weight equities, the recent market decline has shifted equity allocations even lower in balanced portfolios. This puts us in a very powerful position. Our tactical under-weight to equities, along with an above-average cash position, allows us to play offense instead of defense. Why? When others are looking (or being forced) to sell equities, we are looking for opportunities to buy so that we can rebalance your portfolio back to the long-term strategic allocation. We are now buyers at the right price versus sellers at the wrong price.

2008 Comparison

As scary as it may be to buy equities when all they seem to do is go down, that is precisely the time we should be buyers. As Warren Buffett says, “Be fearful when others are greedy and greedy when others are fearful.”

With the S&P 500 down nearly 32% as of this writing, markets are approaching the average bear market decline (-36%). Whether or not this is an “average” bear market is certainly up for debate. 

I’ve recently seen many comparisons to 2008. Are we going to go through the same dramatic decline as 2007-2009? The honest answer is we don’t know, nobody does. However, it’s instructive to examine the comparison.

The U.S. stock market’s steep decline over the last few weeks is reminiscent of the decline in October 2008 as shown in the chart below. The red star shows where the market is today in comparison.

A Users Guide to Portfolio Management SP5001

Every time is different but using this comparison one could expect further declines to come. If we knew for sure that we would see similar declines to 2007-2009, then buying equities here would not be smart. Or, would it?

Let’s widen our view and look forward. If we bought equities at this point in the 2007-2009 decline and held through the market peak a month ago, this is what we would have experienced. 

A Users Guide to Portfolio Management SP5002

Investment markets are scary at times. As investors we must focus on the long-term and not let short-term volatility derail our well-laid plans. Only investors who accept short-term volatility earn long-term gains. 

The Allegiant team has remained disciplined investors of your capital throughout the ubiquitous cycles of hype and hysteria. Leading up to this bear market we looked for opportunities to reduce risk, which positions us very well to start looking for opportunities to add risk assets while prices are down. 

As the headlines get worse, many opportunities are arising for successful long-term investors. In light of this, we must remain calm and carry on, not let our emotions lead us to make bad decisions, and remain focused on the long-term. 

Rather quickly the investment environment has soured. It was only a few weeks ago that many investors were feeling very bullish. Riding on the coattails of a tremendous 2019, most Wall Street predictions were for a continuation of the 11-year bull market. What could possibly bring markets down? 

Fast forward a few weeks and the recent market volatility makes it seem like the world is about to end. While the world won’t end, the 11-year bull market did end. The amount of greater than +/-3% move days over the last couple of weeks is remarkable. While sentiment can change on a dime, and overreact at its peak or trough, it is important to look past the fog and focus on the real economic impacts. 

Bear Market

As a result of the current national emergency situation, Allegiant’s office is closed for now and all employees are working from home. We will keep 100% functionality throughout this crisis, as will our partners Commonwealth Financial Network and National Financial Services (Fidelity). Phone lines will be open and calls will be answered, and all our systems are accessible from wherever we are. While we anticipate some bumps in the road, I want every client to feel confident that we will remain 100% at work for you.

The U.S. Federal Reserve took additional emergency measures to improve financial conditions on March 15th. For the second time in two weeks, the Fed announced an inter-meeting interest rate cut, this time dropping the Federal Funds Rate to zero. In a new measure, the Fed will also allow banks to borrow for up to 90 days, instead of the normal overnight loan. This should provide banks with ample liquidity to meet their day-to-day operations.

With rates at zero, the Fed has now exhausted its most effective policy tool, but don’t rule out negative interest rates over the coming months. In addition, there are other options at the Fed’s disposal to provide more stimulus to the economy.

As I’ve mentioned in the past, the U.S. Federal Reserve is in an envious position compared to other global central banks. Entering this economic slowdown, the Fed had raised interest rates to 1.5%, while other central banks were still zero-bound. This provided the Fed with more ammunition to fight a slowdown. Jerome Powell, the chairman of the Federal Reserve, recently messaged that the Federal Reserve is prepared to use all the tools at its disposal to protect the economy from the impact of the coronavirus pandemic.

The Return of VolatilityIn a Big Way 3 12 20

For much of the current economic expansion the stock market has had limited volatility. When it has appeared, it has been short-lived. The chart above displays the S&P 500 index along with the VIX Index, which acts as a proxy for market volatility. In the last ten years, stocks have steadily moved higher, while the VIX has had very few spikes. Volatility has come back with a vengeance in the last several weeks and does not look like it is going away in the immediate term. Investors must remember that short-term volatility is necessary in order to achieve long-term gains.