Patti’s Keynote at Forbes Top Advisors Summit October 2021

by Eric Fuhrman, CFP®, Chief Planning Officer of Key Financial, Inc.

Download The Inflationary Tale

by Brad Everett, CFA, Chief Investment Officer of Key Financial, Inc.

My name is Brad Everett, and I am the Chief Investment Officer here at Key Financial. Patti is on her way home from a speaking engagement in Australia and in the spirit of seamless (and continuous) attention to your portfolios, I wanted to give you a sense of some of what we’re thinking at this time. As you probably already know, financial markets around the globe have been experiencing increased volatility over the past several weeks, and especially in the past few days, with the S&P down just north of 7% between Friday and Tuesday. As of this exact time the S&P is up about 1.5% out of the gates here, but we’ll see what the day brings.

Much of this has been attributed to the continued spread of the Coronavirus. There has been an increase in confirmed cases outside of China – including Italy, Iran, Japan, and South Korea.

A natural question to ask is how this might affect your investment portfolio? I wish I could say otherwise, but we have no idea. Will the slowdown in China continue? Will the increase in other nations continue? Will the spread of the virus slowdown in the summer, giving researchers some time and a chance to create and produce a vaccine? We won’t know until it’s over whether history will repeat, but we do know how the market has responded to previous health scares. From BobVeres.com:

“When the public became aware of the SARS epidemic (a previous strain of the coronavirus) back in 2003, the S&P 500 index fell 14% over the subsequent two months, from mid-January to mid-March. But, according to a historical look-back by the MarketWatch economists, the market was up 20.76% a year later. The Avian flu outbreak in 2006, the Swine flu outbreak in 2009, the Ebola outbreak in 2014 and the Zika epidemic in 2016 saw initial downturns between 5.5% and 7%, but a year later, the markets had recovered by between 10 and 36%. We can note that the S&P 500 index fell 3% in the two weeks after January 17, when the coronavirus outbreak first made headlines. Since then, the index has bounced back to all-time highs.”

Again, we don’t know the ultimate impact, but the market doesn’t like uncertainty, so we tend to react first by overreacting (the stock market, especially). Is it likely that a virus can decrease the full discounted value of the largest 500 companies in the United States by 3% in a single day? Or 7% in 3 days? Here are a few statistics to put some of this volatility in perspective:

• Multiple sources (WSJ and Barron’s) have estimated the potential economic cost at $400 billion (if the bulk of the cases stay in Asia) or as much as $1.1 trillion if it continues to spread around the world. That sounds like a lot of money. It is. But the total GDP of the world in 2018 was approximately $85 Trillion. A $1.1 trillion cost is approximately 1.3% of global GDP. As a comparison, the US GDP fell 4.3% during the Great Recession from peak (late 2007) to trough (2nd quarter of 2009).
• The value of publicly traded equities grew over $17 trillion in 2019. A three-day, 7% drop in the S&P took us back only to mid-December values. I don’t want to dismiss a 7% drop in the S&P, but we were only recently celebrating all-time highs on the S&P, and after the past few days, we’re still very close to that.

Ultimately, despite the volatility in the market, remember that we started first with a financial plan specifically for you, to represent your goals and plans. Stock market investing is, by its nature, a long-term proposition (as of 2011, in Nick Murray’s book Simple Wealth, Inevitable Wealth, he calculated that 89.5% of all 5-year rolling periods on the S&P 500 have generated a positive rate of return, and 96.4% of 10 year periods. This is what we mean by long term. Not 1 month or even 3 years). No matter the source of volatility, it has always come and gone and will come again, and we need to expect it at any time and prepare for that. Your individual asset allocation is built with that in mind. For those of you taking distributions or will be in the near future, we have been able to plan for how much you need and when you will need it. The earmarks we’ve set aside for near-term withdrawals are invested in asset classes that have shown significantly different return and risk characteristics than the S&P specifically, or equities in general. We’ll continue to monitor this on a daily basis and please let us know your thoughts, how you’re feeling, and if you have any questions.

Key Financial President and CEO, Patti Brennan has just been named by Barron’s as a Hall of Fame Advisor. This prestigious recognition has been given to only 145 Financial Advisors in America. To qualify, each member of the Hall of Fame has had to been named in 10 or more of Barron’s annual Top 100 Advisor rankings. This list is comprised of both male and female advisors in all business models – from the major wirehouses to private wealth management to independent advisors. The goal of the Barron’s Hall of Fame is to recognize those unique advisors who consistently demonstrate excellence in their practice for the people they serve.

Barron’s has been ranking financial advisors since 2004 with its first list ranking the nation’s Top 100 Advisors. In 2006, the Top 100 Women Advisors was introduced, followed by the Top 100 Independent Advisors rankings in 2007. These rankings produce the Hall of Fame list.

Brennan has been a standout in the Barron’s rankings for the past 15 years. No easy feat, considering that over 600,000 people are licensed through FINRA. Nearly half of those identify themselves as Financial Advisors with less than 20% of those advisors being women.

Brennan just returned from the Barron’s UK Summit, where she was the only American Advisor asked to speak about best practices in her firm and throughout the industry. “The credit for this achievement really goes to my team – one of the deepest benches in the field of wealth management. I’m also so grateful to the many clients who have helped me shape what I believe is the gold standard for how objective financial advice should be given today.”

On September 6th, our team at Key Financial hosted our Annual Fall Client Event featuring New York Times Best-selling Author, Amy Bloom. Amy spoke to a packed room about her career, life as a writer, and her latest book, White Houses. We have received such great feedback about Amy’s talk, that we have uploaded her speech for your viewing! We hope you enjoy the wonderful words of Amy Bloom.

Patti Brennan sits down with her daughter Carrie to reflect back on the challenges of simultaneously raising a family while growing a business. Right in time for Mother’s Day, it is an honest and beautiful conversation between a mother and her daughter.

On April 20th, Key Financial will be holding a “Document Shred Event” from 10:00am to 5:00pm. The event will be held at the West Chester Office, located at 1045 Andrew Drive, Suite A. Clients of Key Financial, as well as members of the general public are encouraged to bring any old tax information or documents that they would like to shred in a safe and secure manner. “Now that tax season is coming to an end, we have had many requests from clients asking if they could stop by and shred their old confidential documents”, explained Bernadette Hunter, Director of Communications at Key Financial. “They know we utilize a secure system of document shredding, and in light of all the identity theft issues happening on a national level, we are happy to give them this opportunity.”

Local CPA Bruce Boylston of Rothman Boylston, LLC, has high praise for events like these. “With all of our attention focused on cyber security we tend to overlook our paper. A study not too long ago showed that one in five data breaches involved paper documents. Most tax documents still reflect your social security number along with other information. Best practices is to always shred your paper documents.”

Employees of Key Financial will happily accept all paper documents without any metal bindings. No CDs or flash drives can be accepted.

Recently, our team at Key Financial hosted our first ever “CEO for the Day”, where a local 12 year old was given the opportunity to shadow our President & CEO, Patti Brennan. The idea first came to Brennan after meeting Wyatt through a special program hosted by the West Chester YMCA called Believe and Achieve. As word spread about CEO for the Day, Investment News took the opportunity to feature our story on the first episode of the series “The Secret Life of a Financial Advisor”.

A huge congratulations to our Chief Planning Officer Eric Fuhrman on his new designation! With a young son at home and one on the way, Eric worked over the past year to achieve the Certificate in Investment Performance Measurement™ (CIPM®) designation awarded by the CFA Institute.

The CIPM exam covers ethical performance and risk based evaluation approaches to return measurement, attribution, appraisal, and investment manager selection. The curriculum is based on an advanced body of knowledge that is continuously reviewed and updated by more than 1,000 active investment practitioners around the world to ensure that it reflects the most relevant trends and the core competencies most needed by toda’s top investment employers. After a year of studying, Eric is excited to integrate this knowledge into our service platform. We are so glad to have Eric on our team, and admire his drive to never stop learning!

CIPM is a registered trademark owned by CFA Institute.

Sound interesting? Then save the date!

The next meeting in our very popular series of corporate events will be an informative presentation on Wednesday, September 28th at the Desmond Hotel featuring former FBI Agent and nationally renowned cyber security expert, Jeff Lanza. Jeff will present on the very timely issue of identity theft prevention, cyber security and fraud. Click here for a sneak peek of Jeff’s presentation! Registration opens at 6:30 pm and the presentation begins at 7:00 pm.

Seating is limited, so please call to reserve your seat at (610) 429-9050 or email Bernadette@staging.keyfinancialinc.com. We are looking forward to seeing you all!

The Financial Times, this week put out its 2016 FT 400 list of top brokerage-based U.S. financial advisors. Once again, Key Financial Inc.’s President and CEO, Patti Brennan, has made the prestigious list. Click here to read the article (PDF).