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Special Request:
If you have a friend or family member who has investments and they are concerned about losing money in the market, please have them contact us to receive a complimentary second opinion. We can analyze their existing holdings and show them through independent research what hidden fees they may be paying, as well as provide a risk assessment.

Market Commentary
Four weeks ago, we mentioned that the Coronavirus outbreak would likely provide an additional spike of volatility. The DOW JONES lost money in January, and started out February positive, but then lost over 14% from the peak.

Despite this significant headwind, our in-house managed portfolios outperformed because we already had a defensive posture. Our Income, Conservative, and Moderate portfolios are all still positive year-to-date, while our Aggressive and Sector Rotation are flat to slightly negative. Across the board, we are significantly outperforming. In the 4th quarter of 2019, the Price/Earnings ratio and many other research tools showed that the stock market was the most overvalued in 80 years. We moved to a more defensive approach, which was a bit early, but our concern about the market being overdue for a drawdown was warranted.

The stock market was negative in 2018, up nicely in 2019, and now solidly down in 2020. Since January 1st, 2018 until today, despite the gains in 2019, the DOW JONES index is actually negative. Our Moderate portfolio has earned over 12% over the same period of time and was positive in 2018, 2019, and now 2020 so far. We aim to build on those gains this year by continuing our daily managed portfolio process. 

The World Health Organization raised its risk assessment of the coronavirus to “Very High” on Friday, citing the risk of spread and impact. The Coronavirus has now taken 2,800 lives, and 52 countries have confirmed a total of 82,000 infections. While the virus can cause death, the stock market is most concerned about travel restrictions, as well as factories shutting down and the resulting negative impact to the supply chain (Source:

We are expecting the Federal Reserve to step in soon to offer some form of stimulus to resuscitate the stock market. They will likely start with an interest rate cut and may resort to more extreme measures if that doesn’t work. This worked in the past for the 2008 financial crisis and the correction at the end of 2018, however this situation is not only financial, it’s a potential global pandemic, reaching every continent so far aside from Antarctica. You have likely noticed several trades placed in your TD Ameritrade accounts this past week. That is us actively working for you. This is by far the most active and time-consuming week of investment management we’ve experienced since the financial crisis in 2008. It has been an all hands-on-deck type of situation. If we feel the situation gets out of hand, we may move all or a large portion of the portfolios into cash. Rest assured we only place trades in your best interest, and we are always keeping a close eye on the markets and your money.

We are now patiently waiting for evidence that the worst is behind us, in which case we plan to buy in low and take our hedging strategies off. Overall, we strongly believe that in the short term to intermediate term, the best move is to continue to be defensive and wait for the appropriate signals before we back up the truck and fill up the portfolio with aggressive stocks again. We are patiently waiting for the right time to make a shift in our portfolios.

If you have any questions about taxes, your individual investment portfolio, our 401(k) recommendation service, or anything else in general, please give our office a call at (586) 226-2100. Feel free to forward this commentary to a friend, family member, or co-worker. If they would like to receive this commentary in the future, please send us an e-mail at at your earliest convenience. If you have had any changes to your income, job, family, health insurance, risk tolerance, or your overall financial situation, please give us a call so we can discuss it.

Thank you for your confidence and referrals!

Bob, Ken, Jim, and Zach
Summit Financial Consulting

Interesting Points

NFL football accounted for 47 of the 50 most-watched shows on TV last year. Source: -AXIOS, January 31, 2020

Every female secretary of state in U.S. history- Madeleine Albright, Condoleezza Rice, and Hillary Clinton- was at one time a Girl Scout. –

In the U.S., Valentine’s Day ranks 94th in the year for consumer spending at local restaurants, which is even below Cinco de Mayo. Unsurprisingly, Mother’s Day weekend is ranked both #1 and #2 as the top-grossing days of the year. Source: -Morning Brew, February 12, 2020

The Coronavirus is hammering a global freight industry that relies on China. Shipping rates for the massive ships that carry raw materials have dropped more than 90% since the peak of September 2019. Source: -Bloomberg, January 31, 2020

Greece’s 10-year bond yield dropped below 1% for the first time ever, which is remarkable considering yields were nearly 45% during the financial crises. Source: -Yahoo Finance, February 12, 2020

In December of 2019, the United States exported $17.1 billion in petroleum- the highest on record. Source: -Reuters, February 5, 2020

China’s middle class has grown from 29 million people in 1999 to some 400 million today. Source: -China Briefing, February 13, 2019

Notes & Disclaimer: Stock market indices, like the S&P 500 Index, are unmanaged groups of securities considered to be representative of the stock market in general or subsets of the market, and their performance is not reflective of the performance of any specific investment. Investments cannot be made directly into an index. Historical returns data are calculated using data provided by sources deemed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, or correctness. This information is provided “AS IS” without any warranty of any kind. All historical returns data should be considered hypothetical. Past performance is no guarantee of future results.
This communication is only intended for recipients who reside in states where our agents are licensed to sell these products. Investment advisory services are offered through Summit Financial Consulting, LLC, an SEC registered investment advisor. Registration does not imply a certain level of skill or training. Summit Financial Consulting Investment Advisor Representatives do not render tax, legal, or accounting advice. Insurance products and services are offered through Summit Financial Consulting, LLC. Note: Please update Summit Financial Consulting, LLC, if your investment objectives have changed or if the personal or financial information previously provided has changed. The investment advisory disclosure document that describes Summit Financial Consulting investment advisory services account is provided to you annually. Please consult Summit Financial Consulting for a copy of this document should you need an additional copy. All guarantees are subject to the claims paying ability of the issuing insurance company. Past performance cannot predict future performance. It is not possible to invest directly in an index. The Sherman Group, LLC is not associated with Summit Financial Consulting, LLC in any way, other than a research sharing partnership. Back testing is more heavily scrutinized than any other type of investment analysis because it can be updated to take advantage of past data. The algorithms and trading signals that we receive from the Sherman Group, LLC were created using back testing with the goal of creating a sustainable research process. We have reviewed data from the entire 20 year period which was mostly back tested, and have also personally reviewed the live data for the past 5 years and feel comfortable with it, but we encourage you to meet with us and ask questions so you are fully informed on what we plan to do with your investment assets at TD Ameritrade. It is important to look at fees, taxable repercussions, and trading frequency when looking at a rate of return number. There is no perfect system or research feed, and Sherman Group, LLC has had both longer term and short-term periods where they lost money. Investing involves risk, and these portfolios are no exception.