Will the Stock Market Survive the Coronavirus?

Will the Stock Market Survive the Coronavirus?

Rising fears over the continued spread of the coronavirus have led to a sharp stock market decline as investors grapple with its impact on the global economy. On Monday, March 9, in reaction to news of the virus spread and the recent oil shock, Standard & Poor’s 500 Composite Index fell 7.6%, triggering a 15-minute trading halt. As of March 12th, the Dow closed down 2,352, 10 percent.


How can we make sense of the coronavirus (COVID-19) outbreak and market reaction?


Until January 2020, most of us had never heard of this virus. People are understandably frightened because this is a new disease, and there is much uncertainty over how it will all play out. In short order, we have grown increasingly concerned about the prospect of a global pandemic and its impact on the global economy. First and foremost, the virus has a real human cost. We don’t know how many people are going to get ill or, worse yet, how many may die. Of course, our first thoughts are with the people who have fallen ill and their families.


While this disease is new, there have been many pandemics and other crises in the past, and markets have survived them all. Today, a fair amount of panic has taken hold around the world, and we expect in the coming weeks that a rising number of cases may alarm many people. Eventually, the spread of the virus will slow down and people will get back to normalcy, as will markets.


What does this mean for the economy?

We are already seeing signs of a slowdown in the U.S., not only on the supply side as businesses brace for the road ahead, but also on the demand side. By now we have all heard of large conferences and entertainment events being canceled, firms postponing large meetings, and consumers delaying vacations and seeking to reduce their social contact.


That means businesses related to travel, leisure, entertainment and recreation are likely to be the most impacted, not to mention oil and other commodities where we have already seen a collapse in global demand. 


On the positive side, the U.S. economy remains among the most resilient in the world. It has a history of bouncing back from adversity. Interest rates are low, and the decline in oil prices should further support the consumer. What’s more, in China the spread of the virus appears to have peaked. Given that, the peak of its spread globally will occur sooner than many people anticipate.


What does it mean for markets?


We are experiencing a market decline that we have not seen since the Great Recession. March 9, 2020 was the 11th anniversary of the market bottom during the Great Recession — and the market noted the anniversary by recording the largest single-day point decline we have ever seen. Three days later that was surpassed by the 2,250 drop in the Dow.


With this latest dip markets, as measured by the S&P 500, were down more than 20% from their peak earlier in the year, and we are now in a bear market. This would be the first bear market after more than a decade of generally strong market returns. As a result, in general, equities appeared to be fully valued by most measures heading into this recent period, and markets could remain volatile for some time. In addition to the uncertainty resulting from the spread of the virus, the U.S. is in an election year.


Turning to the bond market, we have seen a flight to safety that has pushed bond yields to unprecedented lows. The yield on the 10-year U.S. Treasury fell to 0.5%. Interest rates could go still lower as the U.S. Federal Reserve seeks to provide liquidity to markets through interest rate cuts and quantitative easing. Over time, low interest rates provide support to equities.


While the pace and magnitude of the recent volatility can be unsettling it is not entirely surprising. Investor sentiment is fragile and will likely remain so until the spread of the virus slows. In times like these, resilient investors who can demonstrate patience can be rewarded over the long term.


We take some comfort in seeing that the Federal Reserve has demonstrated its willingness to take aggressive action, cutting interest rates 50 basis points in an emergency meeting on March 3, which lowered its target range to between 1.00% and 1.25%. The Fed stated that it is “closely monitoring developments and their implications for the economic outlook, and will use its tools and act as appropriate to support the economy.” Markets are generally expecting an additional cut at the Fed’s next scheduled meeting, to be held on March 17 and 18.

How does this compare with crises in the past?


In the 25 years we have spent as fee-only financial advisors, we have experienced a number of unsettled markets, including the tech and telecom bubble in March 2000, and the Great Recession of 2008 and 2009. Each of these crises was very different, with very different underlying conditions. But in each case, the markets bounced back. We believe the markets, and great companies, will survive the current market decline and rebound.


One significant reason why there is such an extreme degree of bearishness, pessimism, bewildering confusion and sheer terror in the minds of advisors and investors alike right now is that most people today have nothing in their own experience that they can relate to, which is similar to this market decline. Our message to you, therefore, is courage! We have been here before. Bear markets have lasted this long before. Well-managed mutual funds have gone down this much before. And shareholders in those funds and the industry survived and prospered.

We have seen many turbulent markets and know how hard it is to avoid getting caught up in the here and now. This is especially true when the media bombards us hourly with news, speculation and rumor. We also know, though, that as long-term investors we must focus on the real world underneath the noise and mesmerizing flow of data.


Should investors expect a quick recovery?


Circumstances may very well get worse before they get better. But we believe eventually markets will rebound. This too shall pass. When it does, long-term investors who can tune out the daily white noise — and red numbers flashing across their screens — and focus on the long term should ultimately be rewarded.


We take the view that we will deal with outbreaks like COVID-19 and eventually we will adjust to it. At Platt Wealth Management, we are taking every precaution to prepare for it. We are working closely with clients, monitoring accounts. We are offering video and phone based meetings and we are reviewing our business continuity plan. We expect that we will be dealing with the COVID-19 virus, and are planning our operations around possible longer term considerations.


What is Platt Wealth Management doing to ensure continuity and care of client assets?


Obviously our first concern is to ensure the health and safety of our associates and clients. But rest assured as this situation evolves, we are working hard to continue to do what we have always done: working with clients to achieve their financial goals, looking for opportunities and making sure clients are confident with their investments. In-depth, long-term view of markets is at the core of what we do. We will do our very best to provide clients with a smooth and less volatile experience than the broader markets.


What should investors be doing?


In periods of declining markets, emotions run high, and that’s natural and understandable. But it is exactly in times like this that a long-term orientation is important. Based on our prior experiences and what has historically occurred, we firmly believe markets will rebound and life will return to normal or what may be a new normal. Now more than ever, investors should be in close communication with their advisors, reaffirming their long-term objectives.

3 Common Investor Mistakes During Election Years

3 Common Investor Mistakes During Election Years

Investing during an election year can be tough on the nerves. 2020 promises to be no different. Politics can bring out strong emotions and biases. Investors would be wise to put these aside when making investment decisions.


Benjamin Graham, the father of value investing, famously noted that “In the short run, the market is a voting machine but in the long run, it is a weighing machine.” He wasn’t literally referring to the intersection of elections and investing, but he could have been. Markets can be especially choppy during election years. Sentiment often changes as quickly as candidates open their mouths.


Graham first made his analogy in 1934, in his seminal book, “Security Analysis.” Since then there have been 22 election cycles. We’ve analyzed them all to help you prepare for investing in these potentially volatile periods. Below we highlight three common mistakes made by investors in election years and offer ways to avoid these pitfalls and invest with confidence in 2020.



Mistake #1: Investors worry too much about which party wins the election



There’s nothing wrong with wanting your candidate to win. Investors run into trouble when they place too much importance on election results. That’s because elections have, historically speaking, made essentially no difference when it comes to long-term investment returns. 


“Presidents get far too much credit, and far too much blame, for the health of the U.S. economy and the state of the financial markets,” says economist Darrell Spence. “There are many other variables that determine economic growth and market returns and, frankly, presidents have very little influence over them.”





What should matter more to investors is staying invested. Although past results are not predictive of future returns, a $1,000 investment in the S&P 500 made when Franklin D. Roosevelt took office would have been worth over $14 million today. During this time there have been exactly seven Democratic and seven Republican presidents. Getting out of the market to avoid a certain party or candidate in office could have severely detracted from an investor’s long-term returns.



By design, elections have clear winners and losers. But the real winners were investors who avoided the temptation to base their decisions around election results and stayed invested for the long haul.



Mistake #2: Investors get spooked by primary season volatility



Markets hate uncertainty, and what’s more uncertain than primary season of an election year? With so many candidates on the campaign trail — 11 Democrats were still running when primaries kicked off in early February — the range of outcomes can feel daunting.



But volatility caused by this uncertainty is often short-lived. After the primaries are over and each party has selected its candidate, markets have tended to return to their normal upward trajectory. 





Election year volatility can also bring select buying opportunities. Policy proposals during primaries often target specific industries, putting pressure on share prices. This cycle, it’s the health care sector that’s in the spotlight as several candidates have proposed overhauls to drug pricing and the health care system.



Does that mean you should avoid this sector altogether? Not according to Rob Lovelace, an equity manager with 34 years of experience investing through many election cycles. “When everyone is worried that a new government policy is going to come along and destroy a sector, that concern is usually overblown,” Lovelace says. “Companies with good drugs that are really helping people will be able to get into the market, and they will get paid for it.” 



In the past, those targeted sectors have often rallied after the campaign spotlight dimmed. It happened with health care following the 2016 presidential and 2018 midterm elections. This has happened with other sectors in the past. This can create buying opportunities for investors with a contrarian point of view and the ability to withstand short-term volatility.



Mistake #3: Investors try to time the markets around politics



If you’re nervous about the markets in 2020, you’re not alone. Presidential candidates often draw attention to the country’s problems, and campaigns regularly amplify negative messages. So maybe it should be no surprise that investors have tended to be more conservative with their portfolios ahead of elections.



Since 1992, investors have poured assets into money market funds — traditionally one of the lowest risk investment vehicles — much more often leading up to elections. By contrast, equity funds have seen the highest net inflows in the year immediately after an election. This suggests that investors may prefer to minimize risk during election years and wait until after uncertainty has subsided to revisit riskier assets like stocks.



But market timing is rarely a winning long-term investment strategy. It can pose a major problem for portfolio returns. To verify this, we analyzed investment returns over the last 22 election cycles to compare three hypothetical investment approaches: being fully invested in equities, making monthly contributions to equities, or staying in cash until after the election. We then calculated the portfolio returns after each cycle, assuming a four-year holding period.





The hypothetical investor who stayed in cash until after the election had the worst outcome of the three portfolios in 16 of 22 periods. Meanwhile, investors who were fully invested or made monthly contributions during election years came out on top. These investors had higher average portfolio balances over the full period and more often outpaced the investor who stayed on the sidelines longer.



Sticking with a sound long-term investment plan based on individual investment objectives is usually the best course of action. Whether that strategy is to be fully invested throughout the year or to consistently invest through a vehicle such as a 401(k) plan, the bottom line is that investors should avoid market timing around politics. As is often the case with investing, the key is to put aside short-term noise and focus on long-term goals.



How can investors avoid these mistakes?

  • Don’t allow election predictions and outcomes to influence investment decisions. History shows that election results have very little impact on long-term returns.
  • Expect volatility, especially during primary season, but don’t fear it. View it as a potential opportunity. 
  • Stick to a long-term investment strategy instead of trying to time markets around elections. Investors who were fully invested or made regular, monthly investments did better than those who stayed in cash in election years. 
What Your Daughter Needs to Know About Personal Finance

What Your Daughter Needs to Know About Personal Finance

Despite our best efforts, people still think of finance as being the man’s domain. The truth is that everyone needs to understand personal finance, so they can manage their money the right way. Even those who choose a wealth manager or financial planner to handle their investments still need to know the basics.

We all know that women tend to live longer than men. It’s likely that at least one point in her life, a woman will not have a partner to rely on to handle her money for her. She needs to be able to do it herself. Even if she eventually chooses to have a company, or a spouse or someone else, take over the money management.

When she’s learned the fundamentals, she can tell if it’s being handled appropriately. What if she never learns how to manage her money? Not only will she be in trouble when she has to handle it by herself, but she won’t know if the person she’s delegated to is knowledgeable and capable of doing the job right!

Of course your sons need to know how to handle their finances too, and the advice below goes for both men and women. However, some issues such as longevity are harder on women and their money than they are on men, generally speaking.

The four cornerstone questions of personal finance

Briefly, the key things to know are: How much comes in? How much goes out? What do I (or we) own, and what do we owe? Both partners in a marriage need to be clear about the answers to these key questions.

How much income, from whatever sources, is coming in? Millennials and younger generations may have side hustles or more than one income stream for each spouse. Even if there’s been an agreement that the separate income streams are (essentially) separate property, both should know approximately how much each is earning. If one spouse tries to hide or minimize it, that’s a red flag to the other spouse.

How much is being spent? Couples may designate “play money” that each spouse can spend on whatever pleases them. It’s important to make sure that the expenses are not exceeding income. Whether or not there’s play money involved.

What’s owned? As we noted in the earlier article, tasks including dealing with the money are usually split between bother spouses. Sometimes one spouse handles daily money management activities like grocery shopping, and the other handles the investments. Either way, both spouses need to know how much is in the investment and retirement accounts.

What’s owed? Both jointly and separately. How much credit card debt is outstanding, and how much of that has both your names on it? How much in student loans? Loans on vehicles, lines of credit, including HELOC?

What’s the current mortgage balance? Whatever the appraised value of the house, the amount actually owned (equity) is the value less the outstanding mortgage balance.

Neither spouse should sign any kind of agreement unless they know what they’re signing. And they’re OK with having their name on it.

For example, if your spouse can’t get a loan without you co-signing, do you know why? And are you comfortable with having your name on that debt? Creditors will come after you for payment, if your spouse falls behind on payments they agreed to make. You could very well see your own credit score drop as a result.

How to create a spending plan


In olden times this was known as a “budget”, but no one likes that word anymore! Each dollar of income should have a job. Savings, debt repayments, and fixed expenses must be covered first before dollars can go to things like entertainment.

Anyone with a household to run needs to know how important it is to keep expenses lower than income. It’s the only way to save money and avoid living paycheck to paycheck. The wider the gap between income and expenses, the more money that can be saved and invested.

You need the analysis skills to look at your current spending and determine where you can cut back, if you’re currently living on credit cards because your income isn’t enough. Also brainstorm ideas for making more money.

The more money saved and invested, the sooner the household is financially independent.


How to invest money

Most people have financial goals, such as retirement. Workers in the US typically no longer have pensions. They’ll rely on Social Security, and their own savings, when they reach the point where they can’t or don’t want to work any more. Which means the retirement bucket needs to be sizeable!

As a rule of thumb (known as the 4% withdrawal rule), a million-dollar portfolio invested 60% in stocks or stock funds and 40% in bonds will generate about $40,000 per year for a retirement period of 30 years without running out of money.

In addition, many people may have other goals, such as buying a house or rental property. Or owning their own business. Etc. Understanding and using the power of compounding is key to achieving all these goals.

As Einstein said, compounding is the eighth wonder of the world! Money doubles in about twelve years, given a return of 6% when simply left alone to grow. It takes eighteen years if the return is 4% (rule of 72). Start with $10,000 and end up with $20,000 by doing nothing (except investing it correctly.)

Investing is dependent on risk tolerance but also on how soon the money’s needed. Longer timeframes, such as retirement for those in their 20s, 30s and 40s, require more stocks in the portfolio. When you don’t have to take the money out for a long time, you can afford to ride out the inevitable dips. No risk, no reward!

Money kept in cash (and lately, bonds) lose ground due to inflation. They’re poor investments for long-term goals. By contrast, when you need the money in five years or less, a stock market drop is bad for the portfolio. Those short-term goals need more bonds and cash to protect against drops.

It’s key for women particularly to understand that even after they retire, they still have a long term timeframe (10+ years). Their money needs to last past retirement. Therefore, they still need a fair amount of stocks in their portfolios to hedge against inflation after they stop working.

Matching the investment to the risk that’s being faced is key. Many investors are afraid of stock market drops, but that’s not the actual risk on a long term timeframe. Inflation is.

Conversely, inflation is not an issue when you need the money within a year. A stock market drop is.

Good news for women investors

When looking at equity investing, women on average outperform men. (Though too many women don’t take enough risk in their portfolios.) Women don’t tend to trade as much, and are better at leaving their portfolios alone to grow and compound. They generally don’t do as much short-term trading. Which tends to generate fees, but not returns.

Women’s style is very well-suited for long-term investing. All women should embrace themselves as investors, and start earning some rewards by taking on more risk.


Want to invite your daughter to your next financial planning meeting with your Platt Wealth Management advisor? Send us an email or call 619.255.9554 to schedule your next appointment.


Women and Finance

Women and Finance

A four-part series of the challenges that women face when it comes to planning for a secure financial future and investing to make that plan happen.  

This is the second article in a series on Women Investors.

The statistics are sobering – over 80% of women will be solely responsible for their finances at some point in their life. Increased longevity and rising divorce rates for women over 50 means that women have special financial needs and concerns.

Longevity is a big issue since women have an average life expectancy of 81, five years longer than men. A study by the Society of Actuaries (SOA) showed that on average, women anticipate living slightly longer than men, but also showed that half of pre-retiree females underestimate the life expectancy of the average 65-year-old woman.

  • Women are likely to face greater financial challenges in their standard of living after divorce or the death of a partner.
  • Women can also be at a disadvantage in their knowledge and experience in dealing with their finances.

The SOA study also showed that women are more concerned than men about paying for long-term care, depleting their savings, keeping up with inflation, and maintaining their standard of living.

  • Women more likely to need help with health care issues and managing their daily lives later in retirement.
  • Women are more likely to be subject to elder abuse because of their longer life expectancy and need for care.

With these statistics in mind, we put together a quick list of ideas to help you start talking about your money, finances, and investments.


Women’s Finance Action Item #1

Get Rid of Debt

Get rid of consumer debt (credit cards and loans), especially those with high interest rates. Paying off your mortgage by retirement can give you flexibility if you need to cut back.

Women’s Finance Action Item #2

Save More, Save Early

Save as much money as you can. If you are in your early career stages, start saving as soon as possible. Increase the amount you save every year when you get a raise or bonus. If you are closer to retirement, start living on your targeted retirement spending now so you can see if it fits your needs


Women’s Finance Action Item #3

Plan for Healthcare

Make a plan for health expenses, incapacity, and long-term care needs later in retirement. Investigate long-term care insurance to see if putting a policy in place makes sense for your needs, desires, and budget. Planning is critical if you want to remain in your home, since in-home care can often be the most expensive option for care in later years.

Women’s Finance Action Item #4

Be Bold, Get Involved

If your partner takes care of the major financial decisions, get more involved. Do you know where to find key documents and how to access your accounts? Know where you stand financially and take an active role in discussions and decisions about your investments.

Women’s Finance Action Item #5

Consult a Professional

Consult a financial professional that can address your concerns about being prepared for retirement. Make sure your plan addresses the longevity and health care needs that women are more likely to face.

Sources: National Vital Statistics Reports, Vol. 68, No. 9, June 24, 2019. Society of Actuaries 2017 Risks and Process of Retirement Survey Report of Findings, January 2018.

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Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary meeting. 619-255-9554.

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How Does the Coronavirus Outbreak Affect the Market?

How Does the Coronavirus Outbreak Affect the Market?

As Chinese authorities deal with a rapidly spreading coronavirus, investors are raising questions about the potential impact on global economic growth and the financial markets. While much is still unknown about the extent of the outbreak — and, crucially, how long it may last — the initial drag on China and other emerging markets is starting to come into focus.


China’s Economy and the Coronavirus Outbreak

China’s economy was already growing at the slowest rate in 30 years before reports of the outbreak first emerged in the central China city of Wuhan. Since then, the Chinese government has placed a dozen cities under quarantine, shut down businesses and schools, and restricted travel in the affected regions. More than 7,700 infections have been reported as of January 30, including a small number in the U.S., Europe and other parts of Asia.

To get a handle on how the outbreak is affecting global economic conditions, we talked to two Capital Group investment veterans who are based in Hong Kong, as well as one of our U.S. economists. Here’s a look at their perspectives:


“Given the quarantine lockdowns, it’s highly likely that the numbers of infected people in mainland China are significantly underestimated,” says Stephen Green, a Capital Group economist based in Hong Kong, “especially in rural areas where medical facilities are limited.


“Depending on how long it takes to contain the coronavirus, we should expect to see sizable declines in consumer spending and manufacturing activity at least through the end of February,” Green adds. “I wouldn’t be surprised if China’s first-quarter GDP growth falls below 6% and some Wall Street estimates are as low as 5%, which is certainly in the realm of possibility.”

A Global Slowdown from the Coronavirus Outbreak

Outside China, the biggest economic impact is expected to be in Thailand, which relies heavily on Chinese tourism. Among industries, travel and tourism throughout Asia will likely take a significant hit, Green explains, along with sales of luxury goods. In addition, many events associated with China’s lunar new year have been canceled. Energy stocks also have fallen sharply as investors expect oil prices to decline further amid lower demand from China.


Since news reports about the virus accelerated around January 17, emerging markets stocks have declined by about 4%, as measured by the MSCI Emerging Markets IMI. Chinese stocks are down more than 6% and Thai stocks slipped 7%. By comparison, the MSCI World Index declined 1.3% during the period through January 29. 

If the economy and markets continue to deteriorate, Green notes, Chinese authorities are likely to launch new stimulus measures, including potential tax cuts and interest rate cuts.

How will the US economy be affected by the Coronavirus Outbreak?

U.S. stocks, meanwhile, have lost about 2% on worries that the outbreak could have a spillover effect on the U.S. economy, including American companies that do business in China. Starbucks has closed about half of its 4,300 stores in China. Many U.S.-based airlines are also canceling flights to the country. And there are growing concerns about supply-chain disruptions for companies such as Apple that have significant manufacturing operations there.

Coupled with Boeing’s recent troubles returning the 737 Max jet to service, the outlook for the U.S. economy now looks more uncertain than it did just a few weeks ago, says Capital Group U.S. economist Jared Franz. Fourth-quarter U.S. GDP growth came in at 2.1% on an annualized basis, according to Commerce Department figures released on Thursday

“If 737 Max production remains grounded through July, then I estimate the impact on first-half GDP growth will be roughly –0.5 percentage points,” Franz says. “The economic impact of the coronavirus on the U.S. is more difficult to calibrate, but I expect it to be modest and mostly felt through trade disruption and financial linkages.” 

Assuming the outbreak is contained soon, Franz said it’s likely global economic growth will experience a V-shaped recovery characterized by slower growth in the first half and a significant acceleration in the second half of the year. The U.S. economy will probably follow the same course.

“U.S. economic fundamentals remain sound, labor markets are resilient and the Federal Reserve stands ready to take action as needed,” Franz adds. “The coronavirus looks to be a modest but temporary restraint on U.S. economic activity via secondary channels of impact, but should not derail my growth expectations of roughly 2% in 2020.”

Coronavirus Outbreak Compared to SARS

That’s similar to the pattern shown after the SARS outbreak that hit China in 2002 and 2003. Key indicators bounced back quickly after the virus was contained. Many investors are looking at the SARS event as a template for what might happen in the weeks and months ahead — although it’s important to note that there were many other factors during that time period, including the aftermath of the 9/11 attacks and the U.S. invasion of Iraq in 2003.


In addition, the structure of the global economy was significantly different. The Chinese economy was largely investment-driven at that time. Consumer spending is a much larger percentage of total economic output today. Travel and tourism activity also was much lower than it is now, with Chinese tourism skyrocketing over the past decade. 


Investment Implications

That’s similar to the pattern shown after the SARS outbreak that hit China in 2002 and 2003. Key indicators bounced back quickly after the virus was contained. Many investors are looking at the SARS event as a template for what might happen in the weeks and months ahead — although it’s important to note that there were many other factors during that time period, including the aftermath of the 9/11 attacks and the U.S. invasion of Iraq in 2003.


In addition, the structure of the global economy was significantly different. The Chinese economy was largely investment-driven at that time. Consumer spending is a much larger percentage of total economic output today. Travel and tourism activity also was much lower than it is now, with Chinese tourism skyrocketing over the past decade. 


That said, market psychology is often highly predictable during times of crisis as investors tend to overreact to distressing news, says Steve Watson, a Capital Group portfolio manager based in Hong Kong. 


“The situation today is very reminiscent of SARS, which we lived through here in Hong Kong 17 years ago,” Watson explains. “The uncertainty was extremely high during the SARS outbreak and it was certainly a difficult time for many people, but once it was over, the following relief rally was powerful.”


As with any large-scale crisis, long-term investors should look for select opportunities that may be generated by a near-term loss of confidence, Watson says. “This is when long-term thinking, on-the-ground research and a focus on value can make a meaningful difference.”


3 Ways A Financial Advisor Can Transform Your Business

3 Ways A Financial Advisor Can Transform Your Business

A business financial advisor can help you avoid costly mistakes and maximize your business returns.

How can a business financial advisor do this? Business professionals live busy (occasionally hectic) lives consisting of hundreds of meetings, client requests, sales goals, and a list of services to uphold. With other tasks taking precedent, it’s easy to add managing your finances as just another thing to check off your ever-growing to-do list. That’s why a business financial advisor is key to maximizing your return from your business.

 Financials are one of the first areas to start slipping through the cracks as a business gains traction and grows. To avoid heading down the slippery slope of inadequate financial management, we suggest hiring a financial professional.


Many business owners avoid hiring a financial planner thinking it will add unnecessary costs, however that is a false reality. Working with a professional business financial advisor can not only save you time and money, but also grant you peace of mind knowing the financial state of your business is taken care of now and in the future. 


The benefits of adding a financial planner to your team are endless, but we’ve compiled a list of our top 3 reasons as to exactly how they can transform the way you work.


A business financial advisor can help you: manage your employee benefits…for your benefit.

It’s no secret that employee benefits, such as a 401(k), are an important piece of your business. While important, retirement plans can also be a tricky process, demanding a large amount of time and attention that many business professionals simply don’t have.

What can a financial planner do for your 401(k) program?

Consult on the details and fine print of your plan

Maintain the health of your account

Manage current assets

Help establish and reach investment goals

Broaden your investment portfolio

By creating a seamless 401(k) plan, your financial planner is also helping your business minimize employee turnover. It’s true — roughly 40% of employees who work for small businesses said they would leave their current company for one that offers a quality 401(k) plan.

Business owners can also receive a tax break from corporate taxes by having a qualified program in place.

A business financial advisor can: execute strategies and help plan your goals.

Capital is arguably one of the most important aspects of a small business, making their investments a vital piece to their long-term success. A professional can help diversify a business’s assets with the long term goal of yielding higher, long-term returns and lowering the risk of individual holdings. Financial advisors will help you maintain a healthy mix of asset types and classes and manage those assets in an efficient way.

Every business’s goals are different and will require a unique mix of assets. Asset allocation and risk tolerance are key determinants when choosing investments taking into account your business’s goals, cash flow needs, and tax considerations.

A seasoned financial planner will:

Keep your portfolio manageable

Know where your money fits best (ex: stocks, commodities, exchange-traded funds, and/or real estate funds)

Continue to build your portfolio based on growth and economic status

Know when it’s time to cut ties with unprofitable investments

A financial advisor is also able to offer you personal financial strategies such as how and when to retire, to help you choose which investments fit best into your future lifestyle. Whether they are optimizing your capital for future business growth or advising on your retirement plan, a financial planner is the backbone for your future successes.

A business financial advisor can: execute strategies and help plan your goals.

A financial planner will be able to help you brainstorm, set, and execute your business’s financial goals. These goals include but are not limited to: exit strategies, investment aspirations, insurance needs, business set-up/liability, and a comfortable retirement plan

All small business owners will eventually exit their businesses, whether it is to start a new business or to begin the adventure of retirement. Either way, a financial planner can help facilitate these sometimes difficult discussions and decisions to help prepare your business for if/when you are no longer there.

Financial planners can also help keep you organized which in turn will help save the business money so it can reinvest in itself. They can give your business the opportunity to expand and grow through:

Employee training
New hires
Additional programs and/or products

Empowering you is our mission as your business financial advisor.


At Platt Wealth Management, our ultimate goal is to empower our clients by providing personalized and seamless financial planning advice and expertise. As a business owner, you wear many ‘hats’ throughout the day, but you are also not expected to be a financial expert. That’s why we’ve developed a four-step financial planning process that is designed to get you where you want to go while providing flexibility to adapt to any changes that may come your way.

Are you looking to strengthen your business or personal finances? Are you ready to save time, money, and gain peace of mind? Look no further — our team is committed to finding you the right solution. Give us a call today at (619) 255-9554 to set up a complimentary review and discuss how a financial planner can fit into your business plan.


Are you on track for retirement?

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is just one part of your journey to the retirement of your dreams. A Certified Financial PlannerTM can help you navigate the complexities of financial planning. Talk to a Financial Planner>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.


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