How to Survive the Recession (relatively) Unscathed

Monday, 15 June 2020

How to Survive the Recession (relatively) Unscathed

While the recent volatility in the stock market, the likelihood of an economic recession, and the proliferation of a global pandemic has had a deep impact on nearly everyone’s portfolio, our clients experienced little to no impact on their retirement income due to our three-bucket investment approach.

Here’s how: our number one focus at TriCapital is to put plans in place to help make sure our clients never run out of money. One of the tools we use to accomplish that goal is our three-bucket approach to asset allocation. Since 1926, large stocks have returned about 10% per year while government bonds have returned between 5% and 6%i so we want our clients to have a significant allocation to stocks in order to benefit from the higher return. However, stocks are also more volatile than bonds and we don’t want to have to sell stocks in order to produce the income our clients need when they are down a lot. To deal with this challenge, we divide our clients’ portfolios into three “buckets”. Here’s a description of each bucket and the process we use to manage our clients’ retirement income.

Oil Prices in Free Fall: How We Went From Peak Oil to Negative Oil

Wednesday, 20 May 2020

Oil Prices in Free Fall: How We Went From Peak Oil to Negative Oil

Just when we thought we had finally seen it all, the COVID-19 pandemic forced oil prices into the negative for the first time in history. Producers were paying as much as $37.63 per barrel as of April 20 to get buyers to take oil off their hands. While one might think finding buyers willing to be paid to accept free oil might be easy, the sharp drop in demand in recent months has lead to a massive oversupply of oil such that buyers have nowhere to physically store it. Some producers have reportedly paid nearly $100,000 per day to lease oil tankers that enable them to store their oversupply at sea.

How We Got Here

How did we go from peak oil prices of $150 per barrel 15 years ago to negative pricing recently? In short, coronavirus has acted like a lead foot on the brakes of a car and air travel worldwide, with safety restrictions severely limiting flights, requiring workers to stay home and non-essential businesses to temporarily close. At the same time, both China and India – two of the world’s largest importers of crude – shut their borders in attempts to contain the coronavirus outbreak.

Phased-In Normalcy

Monday, 20 April 2020

Phased-In Normalcy

By now, you’ve heard reports that the White House has announced federal guidelines for the easing of social distancing orders that have been put in place to slow the spread of the coronavirus. The leadership of different states will have the final say, of course, but the guidelines offer some indication of when we can expect to start congregating again without gloves and masks.

There are three phases in the proposed guidelines. (We are apparently in Phase 0 currently.)

CARES Act Signed into Law –Brings Relief to Millions of Americans

Sunday, 29 March 2020

CARES Act Signed into Law –Brings Relief to Millions of Americans

On March 27 the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to address the unprecedented public health and economic crisis related to COVID-19.

This $2 trillion bill is meant to impact both individuals and businesses and contains significant tax-savings measures. It could affect prior tax years while also creating immediate cash-flow.

Impact on Individuals

Stimulus Checks

Perhaps the most impactful provision for American citizens is the CARES Act’s promise of cash payments of up to $1,200 per single individual and $2,400 for a married couple. Parents will also receive an additional $500 per qualifying child. Payments are phased-out for individuals with incomes greater than $75,000 and for married couples filing jointly with income greater than $150,000.

Provisions are such that payments will be based on 2018 tax returns, though, like the Affordable Care Act’s tax premium credit, there is a true-up related to the amount for which you are eligible on your 2020 tax return. Nonresident aliens, dependents and estates and trusts are not eligible for a stimulus check.

Retirement Plan Rules

Since this bill aims to generate more access to cash, it loosens retirement fund rules. In particular, it waives the 10 percent early withdrawal penalty for distributions up to $100,000 for coronavirus-related use. It also allows for the federal income tax on such distributions to be paid over a three-year term. Finally, these distributions can be contributed back into the retirement fund within three years with no impact on that year’s contribution limit.

The CARES Act also adds flexibility regarding loans from certain retirement accounts when used for coronavirus-related needs. The loan maximum is now the lesser of $100,000 or 100 percent of the accrued benefit. Repayment is also now delayed.

New Awakenings in America

Friday, 27 March 2020

New Awakenings in America

As I sit here in my home office looking out at so many beautiful plants just beginning their gorgeous annual blooming ritual, I am reminded of the new awakening we Americans are experiencing. Americans have a long history of pulling together when needed, from 9/11 to numerous world military conflicts and now to the global COVID-19 virus pandemic. Amid the drumbeat of constant bad news these days there are also many good things happening--one just has to look around a little.

How to Remain Hopeful and Keep Perspective During the COVID-19 Outbreak

Tuesday, 17 March 2020

We are facing something we have never faced before in our lifetimes. That is a fact and, in a time, when the news of the pandemic is spreading and the recommendations on social distancing are getting broader by the day, it can be hard to feel certain or safe about anything. 

As troubling as it is to watch the unprecedented market decline and as hard it is to tune out the fact that you know you are losing a lot on your investments, we need to maintain our health and the health and safety of our family, friends and neighbors as the number one priority. Covid-19 which emerged late in 2019 in China has spread rapidly worldwide since then and is a global pandemic. The measures taken by leaders around the globe have been drastic leaving most children without a classroom to go to, parents working from home or without a job altogether and investors panicking about what is to come. 

This disruption to daily life and to our psyches is substantial and it’s terrible. The coming weeks will not be easy, but these measures are practical and prudent.


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Advisory Services are offered through TriCapital Wealth Management, Inc Securities offered through Triad Advisors member FINRA / SIPC. TriCapital Wealth Management, Inc. is not affiliated with Triad Advisors. We are licensed to sell Insurance Products in the following states: North Carolina, and South Carolina. We are registered to sell Securities in the following states: Delaware, District of Columbia, Florida, Georgia, North Carolina, Ohio, Pennsylvania, South Carolina, and Virginia.

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