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Can the Past Spur Feelings of Optimism Today?
The summer solstice has passed and the days are gradually getting shorter. The movement of the sun signifies that colder days lie ahead. The long school break seems to have lasted an eternity and the pandemic drags on. These days we rely on technology to maintain close, while keeping a safe distance.

Perhaps a window into the simpler times of the past can help us to endure, or maybe even appreciate, our present circumstances. The picture, framing the Teton Mountain Range, as viewed through a window opening of the Cunningham Cabin reminds us of the difficult challenges faced by our ancestors who survived in harsh conditions we might consider to be unbearable today. We've come a long way so let's stay on the sunny side!


  • We are back in the office during normal business hours, but continue to social distance from each other within our individual offices. Should a change to working conditions be necessary, we will let you know.

  • We will continue to host Virtual Meetings using Zoom for your safety. Due to the size of our office conference room, proper social distancing is a challenge. We hope to return to face to face meetings soon and this may be decided based upon the number of individuals participating in a meeting.

  • For those that must visit our office, please check in with us prior to visiting. Once you are in the parking lot, please give us call so we know you are here. There may be periodic road closures due to construction projects currently underway in the immediate vicinity of the office.

  • If you are a Cash Flow Driven Wealth Management client, there was a small update on July 28th to the Wealth Management Navigator Portal. This was done to streamline the navigation to Orion, our money management program. This update moves the access icons from the top of the page into the Menu, preventing overlap with the website logo, task, and alert icons on the page. If you have any questions about this update or anything else please let me know.

  • AFP offers new service for Goal Driven Wealth Management - We are unveiling a new service for younger people and it is called Goal Driven Wealth Management. Our existing Cash Flow Driven Wealth Management Service is for pre-retirees and retirees needing to manage and preserve their wealth. The Goal Driven service model is geared toward those in the wealth building phase. We are pleased to offer this service to adult children of existing clients at a discounted rate.

+ Teri's World
Maintaining the status quo this month. The vegetable garden has been producing and this has kept my weekends busy harvesting - lots of soups and salads! My oldest grandson turned a big 4 this month. We had a small gathering to celebrate this monumental event. Each time one of my grandsons has had a birthday, I have written them a letter. I am planning on giving them the letters I have written and hope to write for future birthdays when they turn 20. It is my way of providing a legacy for them with some reflection of what was occurring around the time of their birthdays. We are planning on taking a family vacation in about a week. Looking forward to some time away from Columbus and probably overdue at this point.  

+ What about Bob
We have had a wonderful August!! It started with a long weekend at Seneca Lake in Eastern Ohio with our daughters Ashley, Brittany, her husband Chris. Our grandson Logan, Naughter (Niece/Daughter) Layla and her friend. Ashley started the weekend off with the announcement that she is expecting a little bundle of joy in March of 2021. We are ecstatic about being grandparents times 2!

Layla is settling in with us very well! We have her registered for school in the fall and she is very excited about this new adventure.

+ Tracey's Time
We safely returned from vacation and with no regrets for having gone ahead with the plans. Things in the National Parks were different for sure due to Covid safety measures. The parks were busy with no shortage of visitors but very limited overseas travelers.

We enjoyed the beautiful vistas of Rocky Mountain and Grand Teton National Parks. The big surprise of the trip was Bear Lake, known as the "Caribbean of the Rockies". We arrived from the dusty and dry south descending hills through curves which opened to a breathtaking view of the lake. The area seems remote and Garden City, Utah just recently installed its' only traffic light to the disappointment of the locals. The area is known for raspberries (which are sweeter than average) and raspberry milkshakes are served everywhere. We had to try them, twice! Unfortunately, the raspberry harvest had not yet begun so we weren't able to pick our own. The area offers a lot of adventure sports, on and off the lake.
Current Economic and Investment Information
UNDER THE PILLOW - Since the beginning of 2020, the size of the money market fund industry in the USA (both taxable and tax-free) has grown from $3.6 trillion to $4.6 trillion as of Wednesday 8/12/20 (source: Investment Company Institute).

NEED A LOT OF MONEY - The US government forecasted on Monday 8/03/20 that it will borrow $4.5 trillion during fiscal year 2020, i.e., the 12 months ending 9/30/20. That total exceeds the $3.8 trillion borrowed over the previous 4 fiscal years of 2016-2019 (source: Treasury Department).

THERE’S BAD, THEN THERE’S AWFUL - The US economy fell 10.0% in size between 3/31/20 and 6/30/20. The United Kingdom’s economy fell 20.4% in size between 3/31/20 and 6/30/20 (source: Office for National Statistics).

WILL THE PANDEMIC CHANGE THIS? - The US fertility rate, i.e., the number of children that are projected to be born to a woman in her lifetime, has declined in 10 of the last 11 years since 2007. The rate was 2.12 children in 2007, falling to 1.73 children in 2018, the latest year that the data has been calculated (source: World Bank).

CALM BEFORE THE STORM? – Banks repossessed 230,305 homes in calendar year 2018. Banks repossessed 143,955 homes in calendar year 2019. Through 7/31/20, banks had repossessed just 40,080 homes YTD (source: Attom Data Solutions).

ONLY HALF? – In order to approve a vaccine, the Food and Drug Administration requires that the vaccine must be at least 50% effective, i.e., the “yet to be approved” COVID-19 vaccine must prevent half the people who receive the vaccine from becoming infected with the COVID-19 virus (source: Food and Drug Administration).

MOST SUSCEPTIBLE - As of 8/08/20, 58% of American COVID-19 deaths occurred to individuals at least age 75, while just 1% of the victims were under the age of 35 (source:
It's Been a Wild Ride
Shortest Bear Market in History

Source: Freedman Financial

On Tuesday, the S&P 500 finished trading at its highest closing level ever, eclipsing the previous record set back on February 19, 2020. This puts an end to the recent bear market and places it in the record books as the shortest one in history! Who would have imagined that?

Although some stocks have exceeded their highs, the overall economy still remains in a recession. While this may seem curious, it happens more than you'd think. During the last 12 recessions going back to World War II, stock prices have gone higher seven times, averaging about a 5.7% increase during these periods. That's because the stock market is generally a leading indicator of what's to come.

While the overall economy is not where it was prior to COVID-19, it has shown strong signs of life (more in some industries than others). Most experts believe the economy will fare much better than initially expected. Jobless claims are heading downward for the first time in months. Consumer spending is up. We're experiencing a booming housing market. The consumer savings rate is way up and many companies (especially tech and online retailers) are reporting better than expected profits.

As long as we wash our hands, wear a mask, and watch our surroundings, we believe that even better times are ahead.

Click below to read the USA Today article:
"How did the stock market hit a record amid COVID-19 fueled recession?"

Do You Know the Difference
Between Being Rich and Being Wealthy?

By Jason Zweig
The Wall Street Journal
It isn’t often that I receive a new book I feel I have to read, but I couldn’t wait to dig into “The Psychology of Money.”

To be published next month, this 242-page, easy-to-read book by Morgan Housel isn’t about investing. It’s about how to think about investing, and it’s one of the best and most original finance books in years.

Mr. Housel, 36 years old, is a blogger and venture capitalist who writes beautifully and wisely about a central truth: Money isn’t primarily a store of value. Money is a conduit of emotion and ego, carrying hopes and fears, dreams and heartbreak, confidence and surprise, envy and regret.

Mr. Housel begins with a shocking anecdote he witnessed himself: A technology multimillionaire handed a hotel valet thousands of dollars in cash to go buy fistfuls of gold coins at a nearby jewelry store. The executive then flung the coins, worth about $1,000 apiece, into the Pacific Ocean one at a time, skipping them across the water like flat rocks, “just for fun."

To that man, money was a plaything. (He later went broke, Mr. Housel writes.) To Ronald Read, however, money was possibility. Mr. Read spent decades pumping gas and working as a janitor in Brattleboro, Vt. After he died in 2014 at the age of 92, his estate was able to give more than $6 million to local charities—because he had scrimped and put every spare penny into stocks that he held for decades.

How, asks Mr. Housel, did a janitor “with no college degree, no training, no background, no formal experience and no connections massively outperform” many professional investors?

Investing isn’t an IQ test; it’s a test of character. Unlike the man who chucked coins into the sea, Mr. Read could defer gratification and had no need to spend big so other people wouldn’t think he was small. From such old-fashioned virtues great fortunes can be built.

Analyzing two of the biggest stock-market winners of the past few decades, Mr. Housel says Netflix Inc. returned more than 35,000% between 2002 and 2018. Monster Beverage Corp. gained more than 300,000% from 1995 through 2018.

Yet, along the way, many investors quit; each stock spent at least 94% of the time trading below its previous all-time highs.

Investors think of such volatility as a kind of “fine” for having made a mistake, says Mr. Housel. Instead, they should regard it as a “fee,” the unavoidable cost of participation. You never know how big the fee will be or when you will incur it, but patience can make it bearable.

Mr. Housel has a knack for looking at the same thing as everyone else and seeing something different. Most investors regard Warren Buffett as someone who has parlayed brilliant analysis, hard work and extensive connections into one of the best track records in financial history. Mr. Housel, however, notices that Mr. Buffett accrued at least 95% of his wealth after age 65. (The chairman of Berkshire Hathaway Inc. will turn 90 at the end of this month.)

Had Mr. Buffett earned his world-beating returns for only 30 years rather than much longer, he would be worth 99.9% less, notes Mr. Housel. “The real key to his success is that he’s been a phenomenal investor for three quarters of a century,” he writes of Mr. Buffett. “His skill is investing, but his secret is time.”

So Mr. Buffett—traditionally viewed as the greatest living example of investing skill—is also proof of the power of luck and longevity.

In a similar vein, “The Psychology of Money” argues the biggest determinant of long-term returns often happens to be when you were born. Adjusted for inflation, people born in 1950 earned essentially nothing in the stock market between the ages of 13 and 30, Mr. Housel shows. Those born in 1970 earned roughly nine times as much on stocks in their formative years. Those born in 2000? They may have to save a lot more than their parents did.

The book isn’t perfect, of course. In describing how financial bubbles form, Mr. Housel says investments get blown up far beyond fundamental value when short-term traders come to dominate a market. That isn’t the whole story; the most enthusiastic buyers in market bubbles often believe they’ll stick around to capture even bigger payoffs in the distant future. Bubbles form when catchy stories and the human need for imitation and conformity turn investing into a social imperative. 

Mr. Housel urges investors to think about what money and wealth are for. He draws a critical distinction between being rich (having a high current income) and being wealthy (having the freedom to choose not to spend money).

Many rich people aren’t wealthy, Mr. Housel argues, because they feel the need to spend a lot of money to show others how rich they are. He defines the optimal savings level as “the gap between your ego and your income.” Wealth consists in caring less about what others think about you and more about using your money to control how you spend your time.

He writes: “The ability to do what you want, when you want, with who[m] you want, for as long as you want to, pays the highest dividend that exists in finance.” 

"You can't use an old map to explore a new world. "

- Albert Einstein
Alexander Financial Planning
1621 W. First Avenue
Grandview Heights, OH 43212

Registered Investment Advisor
This material is distributed by Alexander Financial Planning, Inc., (AFPI) and is for information purposes only. Although information has been obtained from sources to be reliable, we do not guarantee its accuracy. It is provided with the understanding that no fiduciary relationship exists because of this report. Opinions expressed in this report are not necessarily the opinions of AFPI and are subject to change without notice. AFPI assumes no liability for the interpretation or use of this report. Financial planning, investment conclusions and strategies suggested in this report may not be suitable for all investors and consultation with a qualified advisor is recommended prior to executing any investment strategy. All rights reserved.