Coronavirus – Ultra-High Net Worth Response to Black Swan Events
We’re In the Midst of a Black Swan Event – Here’s How to Respond
Warning Sign: You Aren’t 100% happy!
You’ve heard it over and over again when the market crashes in a Black Swan event: Stay the course. Wait it out. Don’t change anything in your investments.
Even though nearly everyone says it, this is bad advice if you want to capture the growth that is likely to begin accumulating once the coronavirus economic fallout bottoms out, while protecting yourself from the downside that is still occurring, and WHO KNOWS, may still occur!
Has your wealth manager or financial advisor matched your expectations of protecting your principal from market shedding over 30% of its value since February? Knowing everything you know now, are you happy with the results?
If you aren’t, this is a likely sign they have adopted the over-exposure to risk and ‘wait it out’ philosophy. As an ultra-high net worth investor with so much more at stake than a typical investor, you should be one of the first people they call. You deserve better, much better, at a time like this.
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An ultra-high net worth investor who had a $30 million portfolio in January and who had their financial advisor make the mistake of not building into their investment plan the inevitability of a Black Swan event, may well be looking at less than $20 million today. Again – has your wealth manager talked with you about how your assets are holding up?
If not, your best response to this Black Swan crisis is probably to look for a new wealth manager. A phone call to Hutch Ashoo, CEO and Co-founder of Pillar Wealth Management is highly recommended.
Mr. Ashoo, with his 30-years of wealth advisory experience, has witnessed several black swan events and helped many, many high net worth investors and families through such financially traumatic times.
Again – regardless of whether you contact Hutch or not, now is the time to act if you want to capture growth, while capturing realized losses to offset current and future gains (potentially recouping up to 50% of your losses), all while protecting yourself from further losses.
What Is a Black Swan?
The term ‘Black Swan’, used today as a reference to an unforeseen and highly unlikely event with catastrophic fallout, dates all the way back to second century Rome. Actual black swans were, at the time, considered to not even exist, though they have since been found on rare occasion, giving further rise to the usage of the term.
In nature, a black swan is unexpected and unpredictable. In global economics, it therefore refers to an unforeseen event that was not able to be planned for in advance, and therefore causes global upheaval.
The coronavirus is the latest example of a Black Swan event.
In December and January, we were talking about the Democratic debates, and the virus was a blip on the radar. By March, whole states and nations were shutting down completely.
Over and over in previous Black Swan events, the market crashes, investors suffer huge losses, and it takes years to recover. We’ve seen this multiple times just in this century, from the dotcom crash to the Sept 11th attacks to the Great Recession, and now with the coronavirus.
Investors are reeling once again, wiping out gains from the last several years.
Isn’t there a better way?
While Black Swans cannot be predicted in specificity, the fact that they will occur is a constant fact of history. The Spanish flu of 1918 that killed millions demonstrates that the coronavirus is not even the first global pandemic, nor will it be the last.
What you must do is find a wealth manager who has developed an investment planning process that incorporates the certainty of future Black Swans into its fabric.
If your wealth manager has failed you in anticipating and preparing for a Black Swan event of this magnitude… if you’re thinking about finding a new more experienced wealth manager… we strongly encourage you to talk with Hutch Ashoo, CEO and Co-founder of Pillar Wealth Management.
As a fiduciary, independent financial advisor, he’s been through multiple black swan events and can advise you about what to do in the midst of this crisis and how to prepare you for the next one.
Because we know one thing for sure: these events will continue to come.
We don’t know when or what. But we know they will. Therefore, we should be able to build this certainty into your portfolio plan so your losses are minimized during the next Black Swan.
Here’s how we protect your portfolio from events outside your control