Warren Ward |

As diligently as I try to polish my crystal ball, the future still looks a bit cloudy to me. Here in Indiana in mid-May, some businesses are re-opening. However, it seems unlikely that decisions being made locally and regionally will prove to be well coordinated nationally. As lockdowns are lifted across the country (and world), I expect that our lives, thus the economy, will begin moving again but ‘in fits and starts’, as my mother used to say.


With the future unclear, might it be possible to examine the past to find a model for how things will be getting back to a more normal footing? A quote usually attributed to Mark Twain suggests that perhaps we can: ‘History doesn't repeat itself but it sometimes rhymes.’ In 1957, the H2N2 flu arrived from Asia. It was first reported in Singapore having apparently made the leap from bird to human. And in 1968, the H3N2 version arrived from Hong Kong: Swine Flu. Obviously, the US recovered from both but there are some different factors at play in 2020. The demographics of our country have changed: our population is older now and much more obese – both thought to be risk factors for the coronavirus. COVID-19 appears to be more contagious than past strains but it’s too soon to tell whether this version of the flu is going to have a higher mortality rate since we aren’t really testing in significant numbers yet. Regardless, I’m sure we’ll survive this shock as we have others in the past and life will go on.


In the meantime, what’s the impact of the virus on financial planning? As I write this note, the stock market has recovered much of the ground lost when the news first broke. That correction allowed us the opportunity to make some changes in our clients’ investment accounts. First, we were able to do some tax loss ‘harvesting’ in order to reduce taxes in this and future years. It also gave us a chance to spend some of the cash we’ve been building over the past couple of years. Regardless of when the recovery is complete, we anticipate that the stocks of the very high-quality companies which we’ve purchased for our clients will do well.


We’ve also tried to stay in even closer touch with our clients than usual – not just to discuss portfolio changes but to provide an opportunity to “talk to a real person” in this time of sheltering in place. Communication of every sort is beneficial in both business and personal relationships. Spending time speaking or face-timing with friends is certainly healthier than passively watching ever greater quantities of repetitive news while stuck at home.


Although we can probably draw some guidance from past events, there’s no way for anyone to accurately forecast what will come next – although that doesn’t stop numerous talking heads from trying. As I said when I quoted Jedi Master Yoda last year: Impossible To See The Future Is. If I knew what was going to happen, I’d prepare for it perfectly on behalf of our clients, then share the news with the rest of the world and pick up my Nobel Prize on the way out the door.


Since things remain cloudy, let me close with the words of a real Nobel Prize winner, author Leo Tolstoy: The two most powerful warriors are patience and time. His advice sounds good to me.