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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.

The 2020 Giving Challenge returns tomorrow! The virtual 24-hour event which helps raise money for local nonprofit organizations occurs from noon to noon on April 28-29, 2020.

This year the Patterson Foundation is matching donations up to $100 with a 1:1 match. So, if you give $100 to your favorite nonprofit organization, the Patterson Foundation matches with another $100. Matches are made on a per-person, per-nonprofit basis.  Therefore, if two separate people from the same household give, the Patterson match can be effectively doubled. As a company and team, Allegiant has already committed to contributing at least $50,000 in gifts to nonprofits through this year’s Giving Challenge.

Kristina Eastmond Director of Client Services Allegiant Private Advisors

By Kristina Eastmond
Principal, Director of Client Service

If you could go back to the moment on New Years Eve when you thought about the year ahead with excitement, I am sure, like me, you now are saying to yourself, “This is not exactly what I imagined!”  So much has changed, for all of us, in one way or another, in so little time.  Many in our community have been hit hard while others count their blessings that it isnt worse.  In order to move forward and navigate this new normal, we must all try to keep our heads above the fear and focus on what is important.  

The world as we know it is at a standstill and Im feeling that a shift is taking place in not only the way we look at the world but how we look at ourselves and each other.  The little things for me are now the big things, and the things I own, my possessions, are simply collecting dust and have less value than ever before. My personal relationships have been renewed and recharged and we are all starting to really reconnect with our loved ones again.  They may drive us crazy now and then (it’s ok to admit it) BUT at the end of the day we still somehow feel grateful.  As we all personally continue to do our part to keep our community and those we love safe and healthy, the Allegiant team remains steadfast and vigilant to our commitment to all of you, our dear clients.  We may be working remotely during this crisis, but that only affects the way we do things; not the quality of what we deliver.

You have heard a lot from the Wealth Advisor and Investment Research teams and they are doing a phenomenal job in keeping the lines of communication open, proactively reaching out to listen to your needs and most importantly, keeping your investment plan in line with your long-term goals.  When you think about why you plan for the future, it is for the unknown, the what-ifs - this crisis is that moment.  It has put your financial plans to the test and only highlights how important it is to plan and have a thinking partner that you can trust. 

A big part of the Allegiant family that can be somewhat behind the scenes is the Client Service team which I proudly lead. Helen, Lynda, Karen, Karyn and I work hard every day to keep our smiles big and service levels high!  Just as you have made adjustments in your daily life to keep things as normal as possible, we too are adapting.  It is our hope that we havent missed a beat and that these adjustments are unnoticeable as we continue delivering the personalized service you expect and deserve. 

Technology to the Rescue

Social distancing has pushed us further into an online and electronic world and I feel this is the perfect time for you to become more familiar and comfortable with the various online tools we have available to communicate with each other and conduct business together.   Not only are these tools easy to use, they also protect your privacy which is extremely important to all of us.

It has been a rough start to the year for the price of crude oil. COVID-19 related shutdowns have decreased global demand for crude oil by an estimated 20-30 million barrels a day. Facing an unprecedented drop in demand, the logical thing to do would be to cut back production. Instead, two of the three largest producers (Russia and Saudi Arabia) engaged in a price war, flooding the market with cheap oil. As a result of both of these issues, West Texas Intermediate (WTI) crude futures lost 2/3 of their value in the first three months of this year. 

Crude Oil Its 2020 and You Cant Give It Away 1

Chart How Coronavirus is Impacting Consumer Spending

Our first glimpse at the economic impact from COVID-19 came from the labor market over the past several weeks. The March retail sales report, released this past week, gave investors an additional look at the impact on consumer spending. As expected, the report showed retail sales fell off a cliff. Even more, the Census Bureau warned that the number could be worse than reported due to sporadic reporting from the hardest-hit businesses. Subcategories tied to discretionary spending reported double-digit month-over-month declines, while businesses associated with the recent stockpiling behavior saw slight increases. As long as many non-essential businesses remain closed, we expect consumer spending data to be particularly ugly. However, once the economy reopens, some pent-up demand will surface. 

On Thursday, April 16, Allegiant's Wealth Management team discussed the CARES Act, Paycheck Protection Program, unemployment benefits and other strategies to help businesses and individuals weather the current economic conditions.

Click here for a recording of the presentation hosted virtually by our Chairman Martin J. Kossoff, CFP®, AIF®; Director of Financial Planning Carl Watkins, CFP®, CDFA™, AIF®; Senior Wealth Advisor Melissa Walsh, CFP®, CFA, AIF®, and Wealth Advisor Michelle Cross, CFP®, CDFA®, CPA, AIF®.

Click here for additional resources related to the CARES Act

We will continue to share updates pertaining to these programs as developments continue.

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

As we continue to keep in touch with clients individually regarding components as they relate to specific situations, the Allegiant Private Advisors team has also prepared several resources related to key provisions of the CARES Act.

As the novel coronavirus pandemic takes hold on the U.S., new economic data is beginning to show the sheer magnitude of the near-term impact. As utterly astonishing as some of the initial data is, we are prepared for the numbers to look even worse. Much of the data only shows a small early glimpse of the social distancing and stay-at-home orders happening across the country. Data over the next month will paint more of the picture. While the numbers may be striking, they shouldn’t be alarming. 

Unemployment Claims

The first glimpse of economic pain came from the weekly unemployment claims data released on March 26th. A record 3.3 million workers filed for unemployment benefits during the prior week. This is a remarkable number, almost five times the prior record of 695,000 set back in 1982. To give some context to this number, it is equivalent to all of the workers in the entire state of Indiana filing for unemployment at once. As if this wasn’t remarkable enough, the following week 6.6 million more workers filed for unemployment benefits. In total, nearly 10 million workers filed for benefits within a two-week period, roughly equivalent to 6% of all those employed in the U.S.

Unfortunately, there is more to come. We expect initial filing claims to continue as businesses temporarily shutter and millions of workers are furloughed. While large, these numbers have not been unexpected to us. As an example, in spite of the 6.6 million Americans filing for unemployment benefits in the April 2nd report, the S&P 500 closed higher on the day. Let me say that again, even with unemployment claims registering a shockingly high record number, the stock market moved higher on the day. 

How can this be? The stock market decline over the previous month already began pricing in these really bad numbers, and it is just taking time for the economic data to catch up with what we all know is reality. This is not to say markets won’t decline more, they certainly can. However, much of the market risk may derive from the length of our self-imposed economic damage, not the short-term severity, which appears largely priced in. A significant increase in the time it takes to fight the spread of COVID-19 could lead to another leg lower in markets. Most likely, that would also lead to another phase of fiscal stimulus to offset some of the negative economic impact. 

Government Response

In light of what we all know will be a dramatically ugly short-term economic picture while the economy is on pause, the federal government has stepped up in a quick and big way. The Federal Reserve has done everything in its power to loosen financial conditions by lowering interest rates and injecting trillions of dollars into financial markets. They acted swiftly and powerfully in historic fashion.

On the heels of the Fed’s actions, Congress came together to pass the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act provides many Americans with direct cash and many businesses with short-term funds designed to retain workers. 

Together, the government’s monetary and fiscal response may have allowed the U.S. to avert a depression. They have injected trillions of dollars into the U.S. economy in what may ultimately amount to roughly 20-30% of annual GDP. As large as the response has been, government officials continue to state they will act more if there is a need. And while phase three of the fiscal response (the CARES Act) was large, talk about a phase four package began even before the third phase was completed. 

One day the U.S. will have to deal with the bourgeoning debt pile, but for now federal debt is not a major concern. A more difficult situation would be dealing with our current debt load while enduring an economic depression. However, debt throughout the rest of the economy may become a near-term issue as we begin to see who has stretched themselves too far. For anyone wanting to dive deeper into this topic I highly recommend reading the recent white paper by Paul Cantor, CFA, CFP®, AIF®, Allegiant’s Chief Operating Officer, The Debt Albatross

Hit the Pause Button

The economy has not stopped, it is just on pause. This is an important distinction. Monetary and fiscal policy actions taken by the federal government have bought the U.S. time while the economy takes a breather. While the government’s actions are not foolproof (far from it) the trillions of dollars infused into the economy provides needed life support as we heal medically. We don’t know exactly when business activity will resume, but the government is taking historic measures to increase the chances that the economy quickly returns to normal once the outbreak is controlled. 

Benefit to Long-Term Investors

A few weeks ago, I wrote a Features article comparing the market declines today to the declines in 2008. Luke Nicholas, CFA, CFP®, Allegiant’s Director of Portfolio Management, wrote a follow-up Features article examining the other instances of 30%+ declines in the stock market and future returns. While the bottom may not be set, history shows long-term investors are rewarded for purchasing equities after such deep declines in the stock market, even though markets may move lower in the short-term.

The decisions investors make during heightened volatility have a magnified impact. As hard as it may be to watch markets decline, following portfolio management best practices like rebalancing can have an outsized positive impact on investors’ long-term results. Controlling emotions is key here, as is keeping a focus on the long term as well. Remember, short-term volatility is the price you pay for long-term investment success

Allegiant is currently making proactive decisions in your portfolios to capture long-term opportunities that will help drive your financial success. We understand the stress and emotional heartache present during times like this and we will continue to reach out to each of you. 

We have also heard from clients seeking our help with friends and family during this time. As the Allegiant team ramps up our efforts with each individual client, we can only hold open limited spaces for new clients. We understand the need and would like to help where we can. If you have someone you would like us to help, we will make every effort to provide them with the same level of service and fiduciary stewardship that you have become accustomed to from our knowledgeable and caring team.

If you would like to see more data and charts about the economy and various financial markets, please click here to view Monthly Insights book.

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Benjamin W. Jones, CFP®, AIF®
CERTIFIED FINANCIAL PLANNER™️
President, Chief Investment Officer, Principal

The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), signed into law on March 27, 2020, includes several small business-focused provisions designed to allow businesses to retain employees and to help them pay expenses during this difficult time. 

If you are a small business owner in need of financial support, here’s what you should know. (Scroll down to learn more, or click here to view the same information in PDF format for easy viewing or printing.) 

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.