Imber Wealth Advisors: May 2020

Sunday, May 31, 2020

Beware of Coronavirus Scams

After a press conference in which President Trump mentioned scientists were testing the potential of using disinfectants as a coronavirus cure, poison control centers across the country reported a spike in calls. In Maryland alone, the Emergency Management Agency fielded more than 100 calls asking about the president’s suggestion. In less than 24 hours of the briefing, the poison control center in New York City responded to more than 30 cases in which people were exposed to disinfectant as a possible treatment.¹

The most important thing to remember in a crisis situation is to seek out credible, vetted information. It is unfortunate that the president’s mere observation of an untested theory was misinterpreted by so many people living in fear of having COVID-19. And yet, the need to verify information and advice goes for any crisis, and even when the crisis is over. Please remember that we are here for you to provide guidance and the most up-to-date information for your insurance needs.

Be aware that the disinfectant snafu isn’t the only type of misinformation out there. Ever since the start of the pandemic, the World Health Organization (WHO) reports there has been a dramatic increase in cyberattacks and email scams targeting the public at large. In fact, there are even fraudsters impersonating the WHO itself, sending emails requesting donations to a fictitious fund that’s supposed to help respond to the virus.²

The most prominent coronavirus-themed campaign has been aimed at people in Japan. Emails appearing to be from a Japanese disability welfare provider contain a leading malware called Emotet. Recipients are encouraged to open an attached document to learn in what areas the infection is spreading the fastest. Once opened, Emotet can automatically download onto their computers.³

Other scams include fraudulent websites that claim to help you work from home, emails selling products that claim to prevent the disease, fake test kits for sale and even scammers taking advantage of the market decline, promising “safe” investments to “get rich quick.”⁴ There is even a COVID-19 blackmail scheme in which scammers threaten to infect victims with the coronavirus if they don’t pay a ransom upfront.⁵

Another recent fraud has successfully scammed people out of money after they called a phone number they thought was the IRS to check on when they’d receive their Economic Impact Payment. The IRS has issued a warning about these scams, cautioning people not to give out any personal or banking information or sign over their Economic Impact Payment check to someone else.⁶

Because these scam artists move quickly and focus on the biggest fears of the day, the government and other regulatory agencies have not had enough time to track them down or prevent them from preying on consumers. It is very important, especially during this stressful time, that everyone be hyper-vigilant about opening suspect emails or clicking on links making an offer that sounds too be good to be true. Remember, if there is a cure or effective treatment or even a vaccine, you will hear about it from your local television news station and read about it in your local newspaper.

Be sure to follow advice and information from only reliable sources about COVID-19 and other health issues.

¹ Peter Aitken. Fox News. April 26, 2020. “States see spike in poison control calls following Trump’s comments on injecting disinfectant.” https://www.foxnews.com/us/states-spike-poison-control-calls. Accessed April 30, 2020.

² World Health Organization. April 23, 2020. “WHO reports fivefold increase in cyber attacks, urges vigilance.” https://www.who.int/news-room/detail/23-04-2020-who-reports-fivefold-increase-in-cyber-attacks-urges-vigilance. Accessed April 30, 2020.

³ Check Point Software Technologies. “January 2020’s Most Wanted Malware: Coronavirus-themed spam spreads malicious Emotet malware.” https://blog.checkpoint.com/2020/02/13/january-2020s-most-wanted-malware-coronavirus-themed-spam-spreads-malicious-emotet-malware/. Accessed April 30, 2020.

⁴ James Royal. Bankrate.com. April 17, 2020. “3 types of coronavirus scams to watch out for.” https://www.bankrate.com/personal-finance/common-coronavirus-scams-to-watch-out-for/. Accessed April 30, 2020.

⁵ Lachlan Cartwright. The Daily Beast. April 29, 2020. “Cyberscammers: Pay Up or We’ll Infect Your Family With Coronavirus.” https://www.thedailybeast.com/new-coronavirus-scam-threatenspay-up-or-well-infect-your-family-with-covid-19. Accessed April 30, 2020.

⁶ Bryant Maddrick. KSHB-NBC News. April 30, 2020. “Couple warns of stimulus scams after reportedly losing hundreds of dollars.” https://www.kshb.com/news/coronavirus/couple-warns-of-stimulus-scams-after-reportedly-losing-hundreds-of-dollars. Accessed April 30, 2020.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

Investment Advisory Services are offered by Imber Financial Group, LLC., a Registered Investment Adviser firm. Insurance services are offered through Imber Wealth Advisors, Inc. Imber Financial Group, LLC. and Imber Wealth Advisors, Inc. are affiliated companies

Thursday, May 28, 2020

Gender Dynamics: Pre- & Post - Pandemic

In past recessions, industries like manufacturing and construction were often the hardest hit. For example, some economists referred to the Great Recession as a “man-cession” because at the outset, more men lost jobs than women. In some households, wives were able to find employment more often than men. The recovery, however, favored men, who regained 5.5 million jobs compared to 3.6 million jobs by women.¹

Today’s pandemic-led economic crisis appears to be taking a different route: Women, to date, are taking on a larger financial toll. As society has progressed, ongoing gender inequities in income and opportunity are having a far more wide-reaching impact. That’s because today, 71% of American households with children rely on women’s income for their financial well-being.²

Going forward, it may be important for people to consider their work roles and how they might weather similar crises in the future. After all, just as we diversify our investment portfolios to help protect assets, households may need to consider alternative sources of income, such as passive income streams, either through assets or other income opportunities. Give us a call if you’d like to explore this further.

The social distancing mandates characterized by COVID-19 have resulted in higher levels of female unemployment due to their concentration in jobs that require close physical contact, such as dental and medical assistants, home health aides, hair stylists and manicurists. Women also tend to work more part-time jobs, which are often the first to be laid off, and may work jobs that do not offer paid vacation or paid sick leave. Even among women who continue to earn income during this difficult period, they are generally paid less. In aggregate, women earn 69 cents for every dollar men earn.³

With schools and daycare centers shuttered nationwide, many working mothers must stay home to care for their children — particularly since care normally provided by grandparents, friends or neighbors is discouraged or prevented by shelter-in-place orders. Among essential services workers expected to remain on the job, nine out of 10 nurses and nursing assistants are women, and more than two-thirds of workers at supermarkets and fast food chains are women — so their health (and that of their families when they return home) is at higher risk.⁴

Some of the problems women are facing right now go beyond the economic. With people spending more time at home, there are reports of increased domestic violence. Women also require more preventive health and reproductive care, so the suspension of regular doctor’s office and well-woman visits could lead to late diagnosis of health conditions and unmonitored pregnancies.⁵

Generation X women, ages 40 to 55, are particularly stretched and stressed out during this difficult time. That’s because many were already sandwiched between taking care of children at home and supporting their elderly parents. Now that they are sheltering in place while trying to juggle work and home schooling, coupled by the strain of not being able to interact socially with older parents, this is bound to take a huge toll both mentally and physically.⁶

On the other hand, sometimes out of the ashes of great loss rises a phoenix, and such an opportunity for women could exist in this circumstance. First is the recognition of how much women’s roles contribute to the fabric of society, in terms of income, consumerism, nurturing and vital jobs — now known as “essential services.” Many husbands at home with the kids may now be realizing the extent to which their wives juggle managing a job, raising children, taking care of elderly family members and most household duties. Hopefully this appreciation will extend beyond the pandemic and outside the household, leading to more equitable pay and policies.

And then there’s likely to be a global recognition of which countries responded best to the pandemic and prevented the most deaths and economic impact. Already, the leaders of Taiwan, Germany and New Zealand are being credited for the greatest success due to early, quick action. While only 7% of the world’s leaders are female, each of these countries is led by a woman.⁷

¹Arne L. Kalleberg and Till M. Von Wachter. National Center for Biotechnology Information. April 2017. “The U.S. Labor Market During and After the Great Recession: Continuities and Transformations.” https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5959048/. Accessed April 27, 2020.

² NBC News. March 23, 2020. “Gender economist Katica Roy: If we don’t act fast, women will bear the brunt of the financial crisis caused by coronavirus.” https://www.nbcnews.com/know-your-value/feature/gender-economist-katica-roy-if-we-don-t-act-fast-ncna1166771. Accessed April 27, 2020.

³ Ibid.

⁴Knowledge@Wharton. April 21, 2020. “Why the U.S. Economic Downturn Could Hurt Women More.” https://knowledge.wharton.upenn.edu/article/economic-downturn-hurt-women/. Accessed April 27, 2020.

⁵ Julia Travers. Inside Philanthropy. April 28, 2020. “Women Face Amplified Risks in the Pandemic. Funders Are Responding.” https://www.insidephilanthropy.com/home/2020/4/28/women-face-multiple-challenges-in-the-pandemic-funders-are-responding. Accessed April 28, 2020.

⁶ S. Mitra Kalita. CNN. April 20, 2020. “Gen X women were already exhausted, then came a pandemic.” https://www.cnn.com/2020/04/20/health/generation-x-coronavirus-calhoun-kalita-wellness/index.html. Accessed April 27, 2020.

⁷ Leta Hong Fincher. CNN. April 16, 2020. “Women leaders are doing a disproportionately great job at handling the pandemic. So why aren’t there more of them?” https://www.cnn.com/2020/04/14/asia/women-government-leaders-coronavirus-hnk-intl/index.html. Accessed April 27, 2020.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

Wednesday, May 20, 2020

Why Sequence of Return is Important

The research firm Spectrem Group estimated that at the end of 2019 there were 11 million millionaires in the U.S. By the end of the first quarter in 2020, that number had dropped by at least half a million. Clearly, the recent stock market woes have taken a toll on everyone, not just the working class.¹

As we learned after the last recession, recovery can take a while— it could be years, in fact. For those on the cusp of retirement, this could be a very real obstacle. Should they retire or keep working longer than planned? The latter offers three clear benefits:

Allow investments time to recover
Continue contributing money toward a nest egg
Give Social Security time to build a larger benefit

In the future, could there be problems with that last benefit? Congress has long brushed aside the pending insolvency of Social Security. Now, the pandemic stimulus packages are poised to further contribute to federal budget problems. In fact, if no changes are made to the Social Security system, the program’s income and reserves won’t cover scheduled benefits within just 15 years. It is projected that by 2035, benefit levels will have to be reduced by 20 percent.² Given current stock market losses, the uncertainty of employment opportunities following the COVID-19 crisis and the unresolved issues with Social Security, it may be time for individuals to seriously consider making changes to their financial strategies and portfolio allocations.

Sequence-of-returns (SOR) risk is the risk of what can happen if the market performs poorly in the years that correspond closely to your retirement date. Losses could lead you to withdraw more from your portfolio than you planned to cover lifestyle expenses. Ultimately, by taking more money from your principal investment, there’s less capital to earn the money you may need during later stages of retirement. In short, SOR risk could cause you to outlive your retirement savings.³

We believe individuals should carefully consider creating a liability-matching portfolio. In other words, you may be able to mitigate SOR risk by adding fixed-income assets and/or an annuity to reliably provide the amount of annual income you’ll need in retirement. In a liability-matching portfolio, your income production after taxes should match your liabilities (expenses).⁴

Retirees should allow for flexibility in their retirement expenditures to accommodate the possibility of poor market returns. However, did you know that some level of income can be insured? With an annuity, the insurance company guarantees to pay a certain level of income regardless of market losses, changes in Social Security benefits, or a global pandemic. A reliable stream of income can help mitigate the risk if one or more of the other sources of retirement income experiences a setback.It’s important to keep in mind that annuities are insurance contracts designed for retirement or other long-term needs. They provide guarantees of principal and credited interest, subject to surrender charges.

As for your current investment portfolio, it’s a bit late for panic selling. Instead, you may want to consider what the U.S. and global economies will look like a year from now, and incorporate investments poised to benefit from lasting paradigm shifts. Some possibilities related to such a shift could include opportunities for working from home, localized and flexible supply-chain alternatives, social and event industry innovations, and a rise in certain demographics—possibly leading to another baby boom. To avoid selling, use retirement accounts to reallocate investments without tax implications and potentially rebalance asset allocations. While staying the course may be an appropriate strategy for long-term investors, be open to new opportunities as they arise.⁵

When managing sequence-of-returns risk, you may also want to consider maintaining a cash component in your portfolio moving forward. Today’s economic environment is a significant reminder of why it’s important to consider transferring assets to more conservative holdings as we edge closer to retirement.

We're here to help! If you have questions or concerns, reach out to us at (734) 769-1719 or office@imberwealth.com.

¹ Ben Steverman. Bloomberg. March 26, 2020. “Coronavirus Shock Is Destroying Americans’ Retirement Dreams.” https://www.bloomberg.com/news/articles/2020-03-26/coronavirus-shock-is-destroying-americans-retirement-dreams. Accessed April 6, 2020.

² Ibid.

³ Bev Bachel. Jackson National. July 16, 2019. “Order Matters in Retirement.” https://www.jackson.com/financialfreedomstudio/articles/2019/07/order-matters-in-retirement.html. Accessed April 6, 2020.

⁴ Raymond James. Jan. 31, 2020. “Don’t Let ‘Sequence of Returns’ Risk Ruin Your Plans.” https://www.raymondjames.com/roismandewaldgroup/resources/2020/01/31/dont-let-sequence-of-returns-risk-ruin-your-plans. Accessed April 6, 2020.

⁵ Stephen H. Dover. Franklin Templeton. March 18, 2020. “Quick Thoughts: Pessimists may miss the up market – don’t become one.” https://www.franklintempleton.com/content-common/market-perspective/en_US/quick-thoughts-pessimists-may-miss-the-up-market-dont-become-one-US.pdf. Accessed April 6, 2020.

All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Any references to reliable or guaranteed income generally refer to fixed insurance products, never securities or investment products. Annuity guarantees and protections are backed by the financial strength and claims-paying ability of the issuing insurance carrier.

Wednesday, May 13, 2020

How to Deal with Financial Stress

A recent survey by the National Endowment for Financial Education found that almost 90% of Americans were feeling anxious about their money situation.¹

39% were worried about job security
48% worried about paying bills
28% didn’t know if they could pay their utilities
41% were worried about not having enough emergency savings
23% were worried about having enough saved for retirement

Even before the COVID-19 pandemic, subsequent mass layoffs and other hardships, a U.S. Bureau of Labor Statistics study revealed that 40% of adults did not have enough cash on hand to cover an unexpected $400 expense.²

Obviously, a home foreclosure or auto repossession can generate a snowball economic effect on a household, but everything from medical expenses to utility bills to parking tickets can coalesce into a high degree of financial distress, causing mental and physical health problems.

If you find yourself in financial stress during this difficult time, there are a couple of ways we can help. First, we understand what you’re going through, so your problems are very real to us. Second, we have access to a variety of different financial vehicles that may help address your unique issues. Please contact us to learn more.

Even in normal situations, financial stress can take its toll on a marriage. A pair of recent studies suggests that partnerships best able to weather financial distress are those in which spouses make a proactive effort to practice “relationship maintenance behaviors,” such as respecting and showing love and affection for each other.³

If you find yourself succumbing to the rigors of financial stress, follow some of the widely touted tips to help — because they work. Better yet, many ways to manage stress are easy and free. For example:⁴

Get regular exercise, particularly in nature.
Learn and practice relaxation techniques, such as meditation or yoga.
Laugh — watch old movies or TV shows that make you laugh out loud.
Eat healthy, well-balanced meals on a regular basis.
Learn to manage your time effectively, making time for hobbies, interests and down time.
Set limits appropriately and say no to things that cause you stress.
Seek out social support and spend time with people who put you at ease.

We're here to help! If you have questions or concerns, do not hesitate to reach out to us at (734) 769-1719 or office@imberwealth.com.

¹ Michelle Fox. CNBC. April 16, 2020. “Coronavirus is causing financial stress for nearly 9 in 10 Americans.” https://www.msn.com/en-us/money/personalfinance/coronavirus-is-causing-financial-stress-for-nearly-9-in-10-americans/ar-BB12J4J7?li=BBnbfcN. Accessed April 20, 2020.

² Knowledge@Wharton. April 9, 2020. “What Contributes Most to Consumer Financial Distress?” https://knowledge.wharton.upenn.edu/article/what-contributes-most-to-consumer-financial-distress/. Accessed April 20, 2020.

³ University of Arizona. April 21, 2020. “What helps couples weather financial storms.” https://www.eurekalert.org/pub_releases/2020-04/uoa-whc042020.php. Accessed April 20, 2020.

⁴ WebMD. 2020. “Stress Management Tips.” https://www.webmd.com/balance/stress-management/stress-management. Accessed April 20, 2020.