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Oh Behave! How to Manage the Emotional Side of Investing

Investors are oftentimes their own worst enemy. Built-in psychological biases can lead to bad decision-making. At Towerpoint Wealth, we believe that being aware of these cognitive predispositions, and overcoming them, can be the single biggest driver to successfully building and protecting one’s longer-term wealth and net worth.

As human beings, we are hard-wired to avoid pain and to pursue pleasure. Additionally, avoiding immediate pain is much more motivating than gaining immediate pleasure (see Loss Aversion in the list below), all of which is good when hunting, gathering, and surviving in the wild, but not so good when it comes to investing. Fortunately, there are many ways to stop doing foolish things with your money, and being mindful of and avoiding these behavioral obstacles is at the top of the list. Emotional decision-making and poor investor behavior have always been major impediments to successful investing. If we are able to recognize, and to some extent, control our emotions and cognitive biases, the probability of achieving the economic results we desire increases significantly.

Author, artist, and financial advisor Carl Richards coined a phrase known as the Behavior Gap to describe the difference between the higher returns that investors might potentially earn and the lower returns that they actually do earn because of their own behavior. A classic empirical example of poor investor behavior and the Behavior Gap is that of the Fidelity Magellan fund.

From 1977-1990, the portfolio manager for the Magellan fund was Peter Lynch, considered by many to be the best mutual fund manager of all time. During the nine years the Magellan fund was open to the public (1981-1990), Magellan earned an annual return of 21.8%However, Lynch himself pointed out a fly in the ointment – the average Magellan investor only earned an average annual return of 13.4% during the same time period. Money would flow out of the fund during setbacks (i.e. investors were selling low), and money would flow back into the fund during advances (i.e. investors were buying high).

The Fidelity Magellan example and Richards’ Behavior Gap concept provide additional evidence supporting the data found in J.P. Morgan’s chart below:

So what are the behaviors and biases that investors need to consider and be mindful of? Below is a “Top Ten” list (in no particular order) of the most prevalent, and important, ones to consider:

  1. Loss aversion – the tendency to prefer avoiding losses to acquiring equivalent gains
  2. Overconfidence – the tendency for investors to overestimate what they know or are capable of; “I know better than everyone else”
  3. Mental accounting – taking undue risk in one area and avoiding rational risk in others; categorizing money and treating funds differently, depending on their origin
  4. Regret avoidance – not performing a necessary action due to the regret of a previous failure; refusing to admit a poor investment decision was made
  5. Herd behavior – copying behavior of others, even in the face of unfavorable outcomes, and whether or not those actions are rational
  6. Optimism – the tendency to believe that you are less likely to experience a negative event than someone else
  7. Anchoring – relying too heavily on familiar experiences, even when inappropriate; relying on the first piece of information to which we are exposed
  8. Framing – how we alter our decisions depending on how information is presented to us; we react a different way when the same choice is presented in the context of a loss or gain
  9. Hindsight bias – the misconception, after the fact, that one “always knew” they were right
  10. Recency bias – favoring a recent event over a historic one; giving greater importance to a more recent event

At Towerpoint Wealth, we embrace our responsibility to help you, our client, to recognize and overcome these behavioral biases. However, we also understand that our clients are human, and recognize that it is impossible to be completely devoid of the emotional biases that can lead to poor decision-making. We balance that by remaining disciplined and objective as your financial coach and quarterback, and helping you identify, be mindful of, and avoid having these behaviors cause negative impact on your plan, strategy, and decision-making. All of this is in the service of affording you complete economic peace of mind.

What’s Happening at TPW?

The entire Towerpoint Wealth family enjoyed a fun night out together two weeks ago, connecting for cocktails at Zocalo’s downtown location, and then for an amazing Spanish dinner at Aioli Bodega Espanola!

TPW Service Highlight

Unbeknownst to some of our clients, Towerpoint Wealth provides integrated counsel, planning, and expertise in a myriad of real estate-specific areas. Advice on buy or sell transactions and negotiations, mortgage, HELOC, and liability analysis, investment property cap rate and return-on-investment (ROI) planning, 1031 like-kind exchanges, Delaware Statutory Trust (DST) sourcing and due diligence, and real estate tax and estate planning are all areas we regularly help our clients directly manage and care for.

Click HERE to read an excellent Forbes article discussing the importance of combining real estate expertise and financial planning.

Towerpoint Wealth Original Content

Inflation may be on the rebound, and real interest rates are moving deeper into negative territory. Both have provided a big tailwind for the price of gold over the past few months.

Should you own this precious metal in a properly balanced investment portfolio? What are the benefits and drawbacks to owning gold? Click below to read our recently-published white paper, GOLD – 24 Karat Shine or Pyrite for Your Portfolio, discussing these, and other important consideration

Trending Today

In addition to fighting investor misbehavior and the shiny appeal of gold, a number of trending and notable events have occurred over the past two weeks:

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, with any questions, concerns, or needs you may have. The world continues to be an extremely complicated place, and we are here to help you properly plan for and make sense of it.

– Nathan, Raquel, Steve, Joseph, Lori, and Jonathan

Towerpoint Wealth Team : Sacramento Financial Advisor
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Singing in the Rain? The Economic and Market Disconnect

The pain caused by the COVID-19 lockdowns persists on Main Street, as evictions, foreclosuresbankruptcies, and unemployment have all soared to unprecedented levels, creating an economic storm not seen since the Great Depression. However, over on Wall Street, the sun hasn’t stopped shining since early March, with the stock market staging an amazing rally based partly on hope about the future and partly on government stimulus.

The S&P 500 has roared back from its late March depths, and amazingly, is just a rally or two away from its late February highs. The technology-heavy Nasdaq recently closed above 10,000 for the first time ever, and seems poised for additional growth as the pandemic has driven major changes to consumer decision-making and demand. For confirmation, see our previous edition of Trending Today, as well as our President’s video message about the “Big Five” technology stocks found below.

What may be most bewildering is the huge disconnect between the rapid bounce-back and advance we have seen in the stock market over the past three months and the horrific 2Q, 2020 economic numbers that, in some cases, will be worse than what we endured during the Great Depression. As we have mentioned, investors are viewing this economic pain and weakness as temporary, and banking on the fledgling economic recovery growing into a more robust bounce back in 2021. The market certainly appears to be seeing the skies as mostly sunny, as investors continue to sing in the economic rain. As the market seemingly defies the pandemic and this immense economic weakness, many investors are asking “what gives?”

We see two main reasons: Hope about the future and health of our economy, and the Fed’s massive stimulus. Investors are currently attaching more weight to the prospects of the economy (and corporate earnings) recovering than to the possibility of a long-lasting pandemic and economic slowdown. The Fed has continued to provide massive amounts of stimulus, and just this week kickstarted a Main Street lending program designed to encourage banks to lend to small and medium-sized businesses hurt by the pandemic. It also announced that it will begin buying corporate bonds to support market liquidity and help make credit available to companies across the country. Additionally, the Trump administration is preparing a new proposal for $1 trillion in infrastructure spending to help revive the U.S. economy, including funding for roads and bridges, as well as 5G wireless infrastructure and broadband for rural areas.

Is this optimism fragile, neurotic, and excessive? Or is it justified, warranted, and a signal of continued (albeit gradual) improvement and economic recovery? At Towerpoint Wealth, we agree with Liz Ann Sonders’ outlook about the market (see below), and feel that while the nascent economic recovery will continue on a long, slow, yet positive path, the market’s growth will be much more frenetic and unpredictable. However, things are beginning to point in the right direction, and it is important to drive not by looking at the rear-view mirror, but instead by looking through the front windshield. Put differently (and as Warren Buffett said), “always better to buy an umbrella when it is sunny outside rather than when it is raining.”

What’s Happening at TPW

Towerpoint Wealth continues to flourish and strategically grow as a firm during these uncertain times, due in part to the strength and depth of our client partnerships, as well as the intra-firm family-first culture we cultivate on a regular basis. As the lockdown slowly unlocks, we feel fortunate to be able to enjoy more and more opportunities to spend time with each other outside of the office as well as in.

Raquel and Jonathan “lunching” at Camden Spit and Larder this week.

Jonathan and Joseph (pre-haircut) (and John Sutter in the middle) at The Sutter Club last week.

TPW Office Update

Pursuant to the story found below, and as mandated by Governor Newsom and the CA Department of Public Health yesterday, please wear a mask when visiting us at our office. We will be!

Trending Today

In addition to wild charts and weather metaphors, a number of trending and notable events have occurred over the past two weeks:

The pandemic will be a part of our lives for the foreseeable future, but fortunately, so will getting out, spending time together (albeit with masks on and standing 6′ apart), and fostering and nurturing the relationships we have with each other. And as always, whether in person or via a Zoom teleconference, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, with any questions, concerns, or needs you may have. The world continues to be an extremely complicated place, and we are here to help you properly plan for and make sense of it.

– Nathan, Raquel, Steve, Joseph, Lori, and Jonathan

Towerpoint Wealth Team : Sacramento Financial Advisor
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A Sugar High From the Money Supply?

“There are no roller coasters that can replicate what stocks have done so far in 2020.”

– Ryan Detrick, Senior Market Strategist, LPL Financial

“Why is the market doing so well when our economy is doing so poorly?”

“How can this bounce back possibly continue?”

“Don’t you think it has come too far, too fast?”

All familiar questions we have recently heard from even the most seasoned and level-headed of Towerpoint Wealth clients, and seemingly for good reason. As of Wednesday, it had been 50 trading days since the S&P 500 hit its COVID-19 crash intraday low (2,191.86) back on March 23. Since then? The index is up almost 40%, marking the biggest 50-day move since 1952! If today’s huge advance holds, the S&P 500 will be just a stone’s throw away from reaching breakeven for 2020, and quickly reapproaching the all-time highs it hit back in February. While not necessarily an enjoyable one for many investors, it certainly has been an epic roller coaster ride.

As unemployment and joblessness have soared in the U.S., so has the stock market. The coronavirus pandemic and the social distancing measures implemented to contain it have adversely affected both the overall demand and overall supply of goods and services in the economy, causing output to plunge. However, the deepest recession since the Great Depression looks increasingly likely to be the shortest. While a full recovery from COVID-19 and the Great Lockdown is not expected until at least 2022, the “green shoots” of recovery have already sprouted, highlighted by today’s historic jobs report.

After losing 20.7 million jobs in April (by far the worst monthly decline on record), the Bureau of Labor Statistics yesterday morning reported that the United States unexpectedly gained 2.5 million jobs in May, the biggest jobs increase ever:

While one month certainly does not make a trend, yesterday’s employment report provides further evidence about how nascent this economic recovery is, and how unpredictable it is, as economists expected a loss of 8 million jobs in May. Nobody said accurately predicting the future is easy! Regardless, this is truly a blowout number, providing hope for a “V” shaped recovery, and clearly the catalyst for the Dow’s 800+ point advance yesterday.

Not convinced? Perhaps noting these additional pieces of information – evidence of economic “green shoots” – will help:

While some investors believe the market is on a “sugar high” due to the vast amounts of government stimulus ($9 trillion globallyso far) that has been doled out, we remain optimistic that the underpinnings of a more substantive – and sustainable – economic recovery are in place. And while virtually all measures of economic activity remain substantially lower than where they were last year at this time, a recovery does have to start somewhere. Additionally, investors have hoarded cash in 2020, providing an ample amount of dry powder to potentially be redeployed elsewhere (and more productively) as investor confidence increases and the recovery takes hold:

While the pace of the growth of these green shoots of economic (and employment) recovery will remain a question for some time yet, at Towerpoint Wealth it seems clear to us that this recession, while unprecedented in its depth, will prove to be short-lived and temporary. And around the corner? Hopefully the foundation for a brighter future again for all of us.

What’s Happening at TPW?

A couple of familiar faces, back together!

From the left in the photo below, our Partner, Wealth Manager, Jonathan LaTurner, our Director of Research and Analytics, Nathan Billigmeier, our Director of Tax and Financial Planning, Steve Pitchford, and our President, Joseph Eschleman, all enjoyed going out to eat together for a business lunch earlier this week at Sauced BBQ and Spirits in downtown Sacramento.

While the crew was missing both our Director of Operations, Lori Heppner, and our Client Service Specialist, Raquel Jackson, who were working from home, the boys enjoyed BBQ and southern-style side dishes as the lockdown in California continues to ease.

Towerpoint Wealth Sauced BBQ And Spirits

In addition to green shoots and collard greens, a number of trending and notable events occurred over the past few weeks:

The lockdown is ending. Life will be different for the foreseeable future, but opportunities to be back together in person with those we have been missing are growing. And as always, whether in person or via a Zoom teleconference, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, with any questions, concerns, or needs you may have – the world continues to be an extremely complicated place, and we are here for you to help you make sense of it.

– Nathan, Raquel, Steve, Joseph, Lori, and Jonathan

Sacramento Wealth Financial Planner Towerpoint Wealth Team
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Gotta Own FAANG For Your Portfolio to Hang?

The COVID-19 crisis has challenged and changed us all in different ways, including what we think of as essential. The conversation over what qualifies as an “essential” versus “non-essential” business has impacted many companies that produce and sell items and services considered essential for everyday use. What do you think of as essential (?) – we encourage you to reply to this email and let us know.

Traditionally defined, consumer staple stocks are broken down into five main industries: beverages, food, household goods, personal and hygiene products, and tobacco – services and items that individuals are either unwilling or unable to eliminate from their budgets even in times of financial trouble. Recently, a more contemporary definition of a consumer staple has emerged from our pandemic-altered lifestyles, and consequently, the definition of a consumer staple stock has arguably changed. Introducing, the FAANG stocks:

Facebook (social media). Amazon (e-commerce). Apple (smartphones and tech hardware). Netflix (video streaming). Google (online search and services). All five companies are known for their dominance in their respective industries and sizable customer bases. Combined, they have a market capitalization of more than $4 trillion! Additionally, as a group (below, in purple), the stocks have collectively outperformed the overall stock market (as measured by the S&P 500, below, in yellow) by a healthy margin so far in 2020: 

While many other companies have experienced major interruptions to business operations during the COVID-19 pandemic, revenue and earnings for the FAANG stocks have been excellent. Facebook doubled its first quarter profit from 2019; Amazon’s first quarter revenue in 2020 increased 26.4% from the same period a year ago; Apple increased its dividend by another 6% on April 30; Netflix now has 182.9 million subscribers, more than doubling its own projections for new paying customers in Q1 of 2020; and Google’s parent company, Alphabet, experienced year-over-year revenue growth of 13% (to $41.2 billion) in the first quarter of 2020. Clearly impressive numbers for these “essential” businesses.

Will companies like the FAANG stocks continue to dominate in the hazy and nebulous “new normal” we are all continuing to get used to, or will things revert and this outperformance be temporary? One thing is for certain – we should get used to life, as well as the financial markets, remaining unsettled and uncertain for the foreseeable future.

Pandemic Notes

  • Did you know that COVID-19 is an acronym for coronavirus disease of 2019? The name was selected by the WHO, the World Organization for Animal Health, and the Food and Agriculture Organization of the United Nations, working in cooperation. Their joint guidelines required that the name and its abbreviation be easy to pronounce, related to the disease, and not refer to a specific geographic location, a specific animal, or a specific group of people.
  • Good news heading into the weekend: While one additional coronavirus diagnosis is too many, the curve is flattening, as new COVID-19 cases in the United States have been stable for over two weeks now, according to Deutsche Bank, the World Health Organization, the CDC, and Worldometer:
  • More than 90 Sacramento restaurants are re-opening for dine-in service this weekend. To see the full list within the Sacramento Bee article, create a free account with the SacBee, or click HERE, and then cut and paste the URL into a web browser opened in “incognito mode” (a nifty little trick):

In addition to our dependence on the aforementioned technology behemoths and our desire to dine out again, a number of trending and notable events occurred over the past few weeks:

We are seeing early signs that these times of separation are beginning to pass, and opportunities to be back together in person with those we have been missing, are beginning to grow. And as always, whether in person or via a Zoom teleconference, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, with any questions, concerns, or needs you may have – the world continues to be an extremely complicated place, and we are here for you.

– Nathan, Raquel, Steve, Joseph, Lori, and Jonathan

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Reaching First Base AFTER Shelter-In-Place

As we trend towards gaining back the freedoms we surrendered in the name of saving lives and flattening the curve, the slow unwind of sheltering-in-place is beginning:

We are continuing to witness the COVID-19 pandemic re-order virtually every industry in the world, and concurrently, many aspects of our formerly “normal” lifestyles. And as we have adapted to today’s slower lifestyle and “new normal,” we have been reminded of just how important our homes have become – as a safe haven, a de facto schoolhouse, an impromptu remote office, and a warm family nest. However, as much as we have learned (a bit forcibly) to love being at home, and as integral as home has been in this new normal, most of us would agree that being at home this much has gotten a little long-in-the-tooth.

There are many more chapters yet to be written about the COVID-19 crisis, and as much as we love our “warm family nests,” this next chapter in the story is one that we all have been anxiously awaiting – the safe and sturdy return to shared communal life, outside of our homes.

As the dawn of the decline of the shutdown approaches, we are all eager to regain the ability to step outside our homes and see friends and family again, to shop at our favorite stores, to eat at our favorite restaurants, and yes, to trade in our trusty sweat pants for our favorite work attire as we begin to head back to work. But make no mistake about it, what our lives will look like as summer approaches will be markedly different that the way we lived our life in February. A “new normal” is upon us, and being adaptable, and socially, economically, and physically aware, is paramount.

A summary of our views:

  • We are all working more hours now than before the COVID-19 outbreak – expect it to continue
  • Companies will begin bringing employees back to work over the next two to six weeks, with strategies for doing so being differentiated and customized based on geography and industry
  • People are starving for connection, and content, and while we yearn for and need physical connection with each other, the transformation of digital communications and social media has been monumental
  • We are optimistic that, as a country, we can and will find the right balance between a compassionate and pragmatic democracy
  • Debt, both personal and governmental, will finally become a central economic and political theme
  • Public confidence levels are quite low, but the condition will be temporary as we continue to learn about the virus and make irregular progress in defeating it
  • Serious concerns surrounding public transportation will lead to a longer timeline for people getting back to work in larger cities
  • We are not planning to see even the possibility for a COVID-19 vaccineuntil mid-2021, at the absolute earliest
  • If there is a significant resurgence in COVID-19 cases this fall, the fatigue of the situation will be extremely painful and we could retest market lows
  • The crisis has been devastating to lower income families, and could cause further longer-term disparity and danger to their well-being
  • Expect taxes to increase, regardless of who wins the 2020 presidential election, as our massive stimulus programs need to be paid for
  • Crises accelerate trends, and there will be larger moves in businesstowards technology, consolidation, and outsourcing, with less need for real estate
  • A New Deal-like infrastructure program will be a central component in additional Federal stimulus borrowing and spending

On a much lighter note, and for anyone who is a fan of Billy Joel (who isn’t?), click HERE (or below) to spend four minutes listening to/watching a VERY entertaining “social distance-sing project” where the Phoenix Chamber Choir performs The Longest Time – the adapted lyrics and instruments are great!

Tragically, some have lost loved ones during this time, and we acknowledge that will change life for them even on the upside of this pandemic. But for most of us, these times of separation will pass and we will be back together, in person, with those we have been missing. And as always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, with any questions, concerns, or needs you may have – the world continues to be an extremely complicated place, and we are here for you.

Nathan, Raquel, Steve, Joseph, Lori, and Jonathan

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How Do We Unlock the Lockdown

At least 316 million people (or more than 96% of the U.S. population) in 42 states are currently under a stay-at-home or shelter-in-place order as the coronavirus pandemic continues to upend life as we know it. However, as California’s Governor Gavin Newsom stated just last month, “This is not a permanent state, this is a moment of time,” and the good news is that we are seeing hopeful time-frames for reopening:

In the meantime, our economy is in an absolute tailspin due to the national lockdown, and Great Depression-esque numbers are expected for the second quarter:

  1. A total of 26 million Americans have filed for unemployment benefits in the past five weeks. That translates to a national unemployment rate expected to be as high as 15 or even 20% as a result of the pandemic that has forced millions of businesses to shutter and lay off employees, significantly higher than the 10% peak seen during the 2008 financial crisis.
  2. The U.S. economy is facing its biggest contraction ever, as GDP for the second quarter is expected to show an annual rate decline of 40%! As a comparison, the biggest drop in growth in U.S. history occurred in 1932, when the economy contracted by 12.9% during the worst year of the Great Depression.

And while it might sound crazy to say, understanding these are nothing short of horrific numbers, there is a clear light at the end of the tunnel.

Why is the stock market (as measured by the S&P 500) up 29% over the past month? One simple answer: The stock market is not a reflection of the current economy. Investors are forward-looking and future-oriented, and they are buying in advance of, and belief in, better days ahead. It can be confounding to grasp when the current state of affairs seems so grim, but it is an essential point for longer-term investors to note and internalize. Since 1953 (with one exception), the S&P 500 stock index has bottomed anywhere from three to 11 months prior to the official end of a recession. In other words, as Warren Buffett said:

We encourage you to read Policy and Portfolio Impact of COVID-19 – A Talk With Dr. Ben Bernanke, as forceful actions by the Fed and bi-partisan Congressional stimulus packages have both led to a backstopping of the financial markets and a temporary de facto safety net for our economy.

The fact that the upcoming ugly U.S. economic figures and data are EXPECTED is especially important to note. While horrific, these numbers will come as no surprise to savvy investors, who understand that stocks almost always rebound before the economy does, and who understand that the market expects the pain experienced by the U.S. economy to be temporary. Questions remain about the shape of the economic recovery and the shape of our new lifestyles, but fortunately the correlation between the temporary nature of our economic pain and the temporary nature of our current shelter-in-place lifestyles cannot be denied.

In addition to anticipating the end of conscientious sequestering and the slow birth of economic recovery, there have been a number of non-COVID-19 newsworthy events over the past few weeks that you may have missed:

As we have mentioned previously, it is important to take comfort that better days are set to return. We will be with our full families again. We will be with our friends and colleagues again. Together. And as always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, with any questions, concerns, or needs you may have. The world continues to be an extremely complicated place, and we are here for you.

– Nathan, Raquel, Steve, Joseph, Lori, and Jonathan

Towerpoint Wealth Team : Sacramento Financial Advisor
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Market Commentary: So much has changed


March 1st seems like ages ago: on that date, the United States reported a nationwide total of just 62 cases of COVID-19; a nursing-home resident in Kirkland, Washington died of the coronavirus, only the second known American to succumb to the disease; and New York Mets baseball pitcher Jacob deGrom looked razor sharp in throwing three innings of shutout baseball in a spring training game versus the Washington Nationals.

In what seems like several months compressed into the space of six weeks, financial asset prices, volatility levels, market liquidity, and investor sentiment have been repeatedly and forcefully buffeted by:

i. Sharp increases in the global and U.S. coronavirus infection growth rates and mounting death totals from the pandemic;

ii. Enormous strains on the physical and human elements of the healthcare system as adequate supplies have been sought of protective gear; rapid, accurate testing protocols; and medical equipment, and crash programs have been launched in attempts to find curative medicines and crucially, therapeutic and preventive vaccines;

iii. The application of massive, rapidly-fashioned monetary policy programs and fiscal relief packages;

iv. Government-mandated lockdowns, cancellations, quarantines, travel restrictions, and social distancing measures leading to extremely sudden and highly synchronized economic slowdowns, business closures, supply chain disruptions, and contractions in world trade activity;

v. Heretofore unencountered increases in new filings for unemployment insurance benefits and estimates of future job losses;

vi. An oil price war, ostensibly between Saudi Arabia and Russia, with deleterious effects on global oil and gas prices; and

vii. A veritable torrent of web-based and media-delivered coverage, press conferences, medicinal advice, conspiracy theories, tragic patient and healthcare provider contagion sagas, geopolitical prognostications, Twitter feeds, Instagram posts, disease progression modeling, and economic forecasts, some quite dire, even apocalyptic, and others, not nearly so saturnine and dyspeptic.


In our opinion, the more-negative, bearish case is based on several worrisome factors:

i. Consumer, corporate, and investor confidence deteriorates as the unfavorable news flow continues about infections and death rates (among persistently elevated concerns about the likelihood of a recurrence in the autumn of 2020 and beyond), even as some areas show signs of leveling off and/or decline;

ii. Financial assistance does not arrive with sufficient targeting, timeliness, nor magnitude to resuscitate or prevent the demise of a significant portion of small- and medium-sized businesses, which account for 44% of U.S. GDP and 47% of private sector employment;

iii. U.S. GDP and corporate profits exhibit very poor (currently, almost unforecastable) results in 2020, with an uncertain, feeble recovery outlook for 2021;

iv. Given high pre-crisis indebtedness, a greater-and-more-widespread than expected level of downgrades, defaults, bankruptcies occurs in the corporate sector, and perhaps also transpiring in the municipal realm;

v. Crude oil and natural gas prices remain under significant pressure for far longer than anticipated, exacting a significant financial and employment toll on highly leveraged entities in the energy industry; and

vi. Societal cohesion and confidence in the wisdom and efficacy of the authorities’ actions suffers some meaningful degree of permanent erosion, with harmful effects on identity, shared values, trust, cohesion, reciprocity, and productivity.


In our opinion, the more-positive, bullish case is based on several constructive factors:

i. Through antibodies testing, isolation, social separation, quarantines, warmer weather, medical treatments, and eventually, vaccines, COVID-19 is brought under control;

ii. Very little damage to the internet, communications, marketing relationships, and transportation infrastructure, combined with “postwar-like” unleashed pent-up demand augmented by newly-restored, improved supply chains are force-multiplied by U.S. Government stabilization programs aimed at individuals and businesses, by sizable infrastructure spending legislation, and by Federal Reserve actions (featuring continued low interest rates, financial support facilities, currency swap lines with foreign central banks, and Quantitative Easing (“money printing”), producing a surprisingly strong restorative effect on psychology and commerce;

iii. Corporate defaults end up being limited to weaker credits and kept at or below predicted rates;

iv. Oil and gas prices return to economically justifiable levels, as meaningful output reductions are agreed upon between the OPEC+ countries (including Russia) and U.S. producers; and

v. A newfound sense of survival gratitude, lifestyle and life-rethinking, national purpose, goal-setting, prioritization (to better prepare for future such challenges), some marginally-improved bipartisan cohesiveness, innovative technological, business, and educational energy, and affirmative direction takes the American nation to new high ground and a luminous era of advancement and restoration.


As of now, quite a bit of bad news has already been reflected into asset prices, and our counsel for the past several months of caution and conservatism has for the most part proved a reasonably defensible and defensive strategy.

While it is quite possible that equity prices and interest rates will retest or even go below their recent lows, we give this scenario a slightly greater than even chance, as the negative fundamental news flow on the pandemic, the economy, and corporate profits seeps into and leads to further investment de-risking, we are inclined to put a modest portion of available cash reserves, if applicable, into high-quality assets (equities, perhaps some gold, and sterling-quality investment grade fixed income securities) of companies possessing fortress-like, cash-rich balance sheets, dividend strength, and defensible business models able to generate high returns on equity over a long time frame. Investors should also consider alternative investments in private credit, private real estate, and opportunistic strategies that are positioned to extract significant value during the current dislocation.


Unemployment Rate 2020

From its March 2020 reading of 4.4%, the U.S. unemployment rate has been recently projected by Macrobond and Nordea to rise to 8.24% in April, 9.67% in May, and 12.7% in June, with CNBC, Bloomberg, and Refinitiv reporting that some sources are forecasting the U.S. unemployment rate could possibly top out around 30%. This is consistent with the more than 22 million jobless claims filings for the four weeks ending April 11th, which means that more than 14% of the 151 million-person U.S. labor force were out of work. In late March, St. Louis Federal Reserve Bank President James Bullard predicted the U.S. unemployment rate may hit 30% in the second quarter because of shutdowns to combat the coronavirus, with an unprecedented 50% drop in gross domestic product. Given the uncertainty of the times, forecasts can vary significantly as we can see. If such a jobless rate should occur, the Statista chart above shows that 30% or more unemployment would surpass the maximum unemployment percentage in each of the six worst unemployment years of the 1930s Great Depression. In our opinion, such severe readings are unlikely to come to pass, and if they did, it would be most likely for only a brief period of time because:

i. the economy should begin recovering as people return to work with more widespread testing leading to the plateauing of the coronavirus; and

ii. the lagged stimulative effects should kick in from the monetary and fiscal support implemented shortly after the severity of the pandemic began to be more broadly recognized.

At the present moment, we assign a less than 25% chance of this severe scenario unfolding, and if it did look likely to persist for any significant length of time, allocation positioning should be devoted to high quality assets.


US Q2 GDP Growth Forecases COVID-19

The above economic forecasts (in the left panel) for 2Q2020 U.S. GDP exhibit a wide range of annualized rates of decline, from -30% by Morgan Stanley to -9% for NatWest Markets, with the median forecast at -12.5%, which is closer to our own thinking. The differences in the above forecasts primarily stem from varying assumptions as to: 

i. the efficacy and reach of the fiscal and monetary assistance programs;

ii. the severity and persistence of short-and intermediate-term impacts of the pandemic (and measures taken to counteract it) on business outlays, employment, consumer confidence, and personal spending and savings rates; and

ii. how fast and to what degree conditions return to the neighborhood of pre-crisis levels.

In the second panel, Oxford Economics projects a -11.5% annualized year-over-year rate of decline in U.S. GDP in 2Q20, followed by +3.2% annualized in 3Q20, and then +14.5% annualized in 4Q20. Should something similar to this forecast pattern unfold, equity prices and interest rates should rise, with outperformance by consumer, transportation, energy, industrial, materials, and financial stocks. Utility issues should lag, with pharmaceutical and other healthcare stocks once again likely to find themselves influenced by the tone and rhetoric of the national elections on Tuesday, November 3, 2020.

An Deeper Recession Then The GFC

It should be kept in mind that the 2020 pandemic recession follows eleven years of economic growth, the longest recorded economic expansion in U.S. history. The 2009-2020 recovery featured: 

i. materially increased corporate and government indebtedness and;

ii. more modest rates of GDP growth, the latter of which perhaps helped avoid some of the economic overheating and inflationary forces associated with more robust expansions.

Even as this recession is likely to be deeper than the recession experienced in the 2008-2009 Global Financial Crisis (as projected in the top left panel), the government-mandated nature of the lockdowns and cancellations underpins our current belief in a moderate recovery, which should become somewhat more vigorous with the passage of time, without persistently higher levels of precautionary savings post-crisis eating into personal consumption and thus miring the U.S. economy in ongoing economic stagnation. Our call to selectively add exposure to risk assets is predicated on the assumption of a modest-at-first 3Q20 U.S. recovery that gradually adds momentum in 4Q20 and into 2021.

In the right panel above, Oxford Economics is projecting a swift and sharp V-shaped rebound in the global economy, paced by the U.S. and particularly, by China. By contrast, owing to many countries’ generally less-aggressive policy measures taken to counteract the economic impact of the coronavirus, we have currently adopted more of a “wait and see” stance on the economic growth outlook (and thus the debt and equity securities) of developed economies (including Europe, Japan, Canada, Australia, and others) as well as the emerging economies (of Asia, Latin America, Africa, the Middle East, and elsewhere).       


DPS Growth EPS The Profits Outlook

According to consensus forecast data compiled as of April 6, 2020 by Yardeni Research, Inc., the historical and estimated earnings per share and year-over-year growth rates for the Standard & Poor’s 500 companies are as follows : 

i. For 2017, $131.98, +11.8%; 

ii. For 2018, $161.93, +22.7%; 

iii. For 2019, $160.00, -1.1%; and 

iv. Estimated for 2020, $120.00, -26.4% (with quarterly year-over-year comparisons of 1Q20 -23.4%, 2Q20 -51.6%, 3Q20 -28.8%, and 4Q20 -4.8%); and 

v. Estimated for 2021, $150.00, +25.0% (it should be pointed out that these S&P 500 earnings per share, if achieved, would still be roughly 7% below the 2018 and 2019 results). 

In each of the two panels above, it can be seen that Goldman Sachs expects a deeper year-over-year earnings decline than does Yardeni Research for the full year 2020 (-32.5%) and in 2Q20 (-123%), with a higher-than-consensus year-over-year recovery in 4Q20 (+27%) and for 2021 (+55%). 

Recognizing that forecasting earnings is particularly difficult in the current uncertain environment for interest rates, domestic and international economic growth, currency levels, energy prices, wage rates and hours worked, our view currently stands closer to the consensus view, with S&P 500 earnings per share likely to decline more than 25% this year and then rebound by a similar 25% in 2021. This supports our call for continued emphasis on defensive sectors and highest-quality assets, with a disciplined, measured, dollar-cost-averaging approach to adding risk through each phase of the public health and economic crunch. 

The second panel above also shows that total S&P 500 dividends are estimated as likely to fall by 25% in 2020, followed by a minuscule +3% expected dividend growth in 2021. This underscores our longtime emphasis on companies with high returns on equity, adequate current and future after-tax earnings, sufficient liquidity and cash levels, and manageable leverage that can maintain or even increase their dividend payouts through capital discipline, balance sheet strength, and financial prudence. 


Bear Markets and Recoveries

The suddenness and severity of the recent equity market selloff stimulates questions as to: how long the U.S. equity bear market might continue; whether or not the maximum decline has been experienced; and how long it will take for the S&P 500 index to again reach its February 19, 2020 record closing high of 3,386.15. 

With full awareness that “although history never repeats itself, it sometimes rhymes,” the upper left panel may provide some perspective. For the 10 S&P 500 bear market episodes (excluding the current one) experienced from the mid-1950s to the present, the chart shows: 

i. The duration of the bear market episodes ranged from a low of three months in 1990 to a high of 31 months in the 2000-2002 interval, with an average (mean) duration of 14.2 months, or just over a year; 

ii. The severity of the bear market declines ranged from a low of -20% in 1990 to a high of -56% during the 2007- 2009 years, with an average (mean) decline of -34.2%; and 

iii. The length of the recovery to the previous highs ranged from 4 months in 1990 to 69 months during the tumultuous decade of the 1970s, with an average (mean) recovery taking 25.4 months, slightly over two years. 

The severity and length of this decline, as well as the path and length of the stock market recovery, depend on numerous factors, including:

i. How successful the authorities in the United States (and not to be minimized, internationally) can bring the spread of the pandemic under control and develop preventative and therapeutic vaccines and other medicines; 

ii. How quickly the lockdown orders and other containment measures can be lifted, allowing academic, business, travel, entertainment, and other activities to resume; 

iii. How profoundly the psychological impact of this crisis affects corporate and consumer behavior, savings rates, and investment; and 

iv. The initial stages of enduring longer-term consequences for commerce, societal norms, supply chain structures, global trade patterns, energy markets, political dynamics, and geopolitical relationships. 

Notwithstanding the drawn-out experiences of the 2000-2002 dotcom bust bear market and the 2007-2009 mortgage finance bear market, delineated above in the upper right panel, our current assessment, given how swiftly the S&P 500 index “took its bitter medicine early,” is for U.S. equity prices this time to experience a briefer-than-average bear market time span (under a year in length), an average S&P 500 bear market total decline (meaning a good part of the damage has already been done), with a below-average length of time needed to reach the February 2020 highs (perhaps comfortably before the rescheduled Tokyo Olympic Games, July 23-August 8, 2021). 


Over the weekend of April 11–12, 2020, OPEC and allied oil producers, led by Saudi Arabia and Russia, agreed to cut production by 9.7 million barrels per day (roughly one-tenth of global supply) during May and June, with Saudi Arabia and Russia together sharing 5.0 Million barrels per day of the cuts, and other OPEC+ producers agreeing to remove an additional 4.7 million barrels per day. With G20 support in the form of oil purchases for storage and declining production in North America, this could mean as much as 15 million barrels per day of supply will potentially be removed from the market. Combined with existing sanctions on Iran and Venezuela and outages in other countries such as Libya, the measures could help withhold as much as 20 million barrels a day of supplies from the market, OPEC stated in a draft press release. 

The top panel shows NYMEX Oil Futures over the past 20 years, now in the high teens for West Texas Intermediate Crude. Covering a much longer time frame, the bottom panel illustrates the cyclicality of oil prices ever since the early 1970s, when the U.S. dollar was de-linked from gold and allowed to float freely subject to market forces. Given current projections of oil’s pandemic-stage global demand swiftly declining by as much as 30 million barrels per day or more, without further supply reductions, it will be virtually impossible to achieve oil prices anywhere near the $40-$50 per barrel range, which represent breakeven levels for many U.S., Canadian, and other producers, much less for national petroleum companies which need these or higher prices to help balance their governments’ annual spending budgets (The Wall Street Journal reports that Russia needs an oil price of $40 a barrel to balance its budget and the Saudis around $80). Several forecasters have even predicted single-digit prices as pipes, tank farms, oil at sea, and floating storage facilities reach capacity. Facing limited places to stockpile oil, crude has recently changed hands for as little as (and even below) $7.00 a barrel in Midland, Texas, and $5.00 a barrel in Alberta’s oil sands. 

Such dramatic dislocations have numerous adverse and damaging implications, a few among them: 

i. Even as stronger energy firms consider whether to acquire the assets of their weakened and/or bankrupt competitors, they face decisions whether to implement the drastic and potentially costly actions of shutting loss-making wells, risking downhole groundwater and corrosion damage to the associated reservoirs (Rystad Energy, a Norwegian independent energy research consultancy, has predicted that U.S. production could fall by close to 4 million barrels per day by the end of 2021, compared with a record high daily output above 13 million barrels in late February); 

ii. Already in 2020, U.S. producers have responded to the collapse in demand (and a price war led by low-cost producing nations to gain market share) through 30-50% cutbacks in capital spending; oil service companies face equally or more severe business reductions as, according to Baker Hughes, the number of rigs drilling in the United States has fallen to 600 in mid-April from 800 in early March; 

iii. With traditional buyers of high- yield debt having become more discriminating, many heavily indebted shale energy companies are now struggling to make interest payments on the debt they carry and are finding it challenging to raise new financing. According to Moody’s, North American oil exploration and production companies have $86 billion in debt maturing between 2020 and 2024, and pipeline companies have an additional $123 billion in debt coming due over the same period; in 10 of the last 11 years, energy companies have been the single largest junk bond issuers, and since 2016, when oil prices began to decline, more than 208 North American producers have filed for bankruptcy involving $121.7 billion in aggregate debt; 

iv. In efforts aimed at protecting their dividends amidst flat to down oil production and depressed prices, the larger, well capitalized oil companies have increased borrowing, cut capital expenditures, suspended stock repurchase programs, and implemented workforce reductions; and 

v. Slumping oil prices and production levels have put meaningful downward pressure on tax revenues, government budgets, employment levels, and the economies of several oil-producing states including Texas, Oklahoma, North Dakota, and Alaska, especially in rural areas heavily dependent on oil. 

Over the intermediate-term into 2021, it is possible to foresee a structural shift towards higher oil prices as economies recover, demand begins to normalize, and new investment in oil supply becomes required. For patient, contrary-minded investors, we continue to strictly emphasize quality in purchasing the equity and debt issues of companies in the energy space, focusing on enterprises with: 

i. diversification in upstream, midstream, and downstream operations; 

ii. discipline in capital allocation; and 

iii. dividend protection. 


FRED Modern Monetary Skyrocket Deficits

Beginning by cutting interest rates effectively to zero and announcing a $700 billion round of quantitative easing (“money printing”) on Sunday, March 15 in a surprise press briefing, the Federal Reserve embarked on a large-scale program employing a broadening array of policy actions, emergency powers, and lending programs in order to stabilize the U.S. economy under pressure from the COVID-19 pandemic. Among other additional steps taken in succeeding weeks, these measures include: 

i. Loosening banks’ balance sheet reporting requirements, total loss absorbing capacity metrics, required capital levels, non-critical oversight reviews, reporting schedules, counterparty risk assessment methodologies, U.S. Treasury securities-for-repurchase agreement exchange protocols, and corporate ownership control provisions; 

ii. Encouraging more active use of the Fed’s “discount window” (which banks can use as an emergency funding source); 

iii. Coordinating international actions with an expanded roster of foreign central banks to improve access to U.S. dollar liquidity swap arrangements; and iv. Creating funding facilities and/or giving regulatory relief to support taxable and tax exempt commercial paper, collateralized loans to large broker-dealers, money market mutual funds, high-quality municipal debt and variable rate demand loans, commercial and other mortgage-backed securities, corporate credit, corporate bonds, loans to small- and medium-sized businesses, business development companies, certain high yield securities, and some high-yield exchange traded funds. 

As a result of these actions, and the various Quantitative Easing programs instituted by the Federal Reserve during and in the wake of the 2008-2009 financial crisis, the left panel shows how the Federal Reserve’s total balance sheet has swollen, from $1.0 trillion in early 2008 to $6.0 trillion as of mid-April 2020. Numerous projections, taking into account the Fed’s money printing to purchase Treasury securities to help fund the enormous U.S. government deficits (estimated by the Federal Reserve Bank of St. Louis to reach 13% of GDP in 2020, as shown in the right panel above), posit that the Fed’s total balance sheet could reach at least $9 trillion. Such large and heretofore unencountered monetization of Treasury deficits naturally raises questions about: (i) America’s credit rating; and (ii) the long-term inflationary impact (with potentially upward pressure on interest rates) associated with massive money printing. While we share such concerns over the long term, we agree with Fitch Ratings, which on March 26, in affirming the U.S.’s AAA credit rating, stated that “recent dislocations and illiquidity in the market for U.S. Treasuries reflect changes in the structure of the market and exceptional conditions, and do not signal heightened perceptions of U.S. credit risk on the part of investors.” We are also of the opinion that, given the exceptionally large short-term contractionary and deflationary forces acting on the economy, the risks of rising interest rates are modest for now. As a consequence, income-oriented investors may purchase (or continue to hold) high-quality investment grade and municipal securities, as well as high yield issues at the uppermost end of the credit spectrum. 


Global Gold Demand in 2019

The precious yellow metal, gold (not subject to oxidation or corrosion, with 79 protons in its nucleus, and an atomic weight of 196.96) was termed “a barbarous relic” by the eminent British economist John Maynard Keynes (1883-1946). Gold has many fervent fans and equally passionate skeptics. 

Paraphrasing from The Art of Asset Allocation, Second Edition, selected bullish and bearish views of gold are set forth below. 

Bullish Views of Gold: 

i. For centuries, the intrinsic value of gold has been widely accepted due to its rarity, beauty, durability, indestructibility, malleability, ductility, portability, divisibility, and anonymity; 

ii. Unlike many managed-paper currency systems’ “fiat money,” gold has a slowly changing and relatively inelastic supply, one reason why many central banks own and/or purchase gold (as shown in the right panel above, 15% of gold demand in 2019 came from central bank purchases), is to enhance perceptions that their country’s currency is at least partially anchored in a “real” asset. Gold is considered to be the only monetary asset that is not the liability of another party (as the renowned financier John Pierpont Morgan (1837-1913) is reputed to have stated, “gold is money; everything else is credit”); 

iii. During many previous periods of excessive inflation, environmental catastrophe, financial markets turmoil, deflationary shock, monetary system failure, geopolitical instability, military action, or a breakdown in societal order and confidence, gold has been viewed as a form of insurance protection and refuge; 

iv. Over sufficiently long periods of time, gold has tended to retain its purchasing power compared to the cost of fundamental human needs such as food, shelter, and clothing; and v. Gold has generally (though not always) exhibited negative or very low correlations of returns with almost all other asset classes, thus appealing to some investors as a form of hedging against unfavorable movements in financial asset prices. 


  i. Physical gold has no yield, trades in relatively low volume and at times in illiquid markets, is cumbersome to transport in large quantities, may incur costs of assay, custody, taxation, segregation, and insurance, and may be difficult to access in unsettled conditions; 

ii. Partially owing to its reputation as a controversial, anti-establishment asset, gold may be subject to governmental confiscation through the sealing of safety deposit boxes and other measures, the declaration of gold payment classes as unenforceable, and governments’ arbitrary fixing of gold prices; 

iii. For substantial intervals during eras of financial and geopolitical stability, gold prices may move essentially within a mean-reverting band, influenced by the level of real interest rates; the demand for jewelry, industrial uses and identified bar hoarding; and sources of supply, including new discoveries, production, forward sales and hedging by gold mining companies, gold scrap recycling, and central bank selling and gold lending activity; 

iv. Although gold as an asset may be considered a conservative investment, some segments of the global physical and derivatives-based gold markets have at times been considered to lack sufficient regulation and have been thought to include speculative and momentum-based traders, promoters, conspiracy theorists, and dogmatic participants whose views may lack objectivity; and 

v. Due to their effectively embedded option component linked to potential movements in gold prices, gold mining shares have substantially leveraged exposure to changes in the gold price, tend at times to be expensively valued, and may sometimes be difficult to assess using conventional methods. 

As shown in the left panel, gold prices have been rising in recent years, driven by: limited levels of investment competition from declining, ultralow, and in a meaningful number of cases, negative interest rates; some degree of investor distrust in substantial money printing by many of the world’s major central banks; and “haven demand” by investors seeking protection from perceived systemic fragility and geopolitical instability. 

Our view continues to be that gold and/or gold mining shares deserve consideration and a legitimate place in investment portfolios, with the specific percentage allocation determined by the investor’s motivations, fears, amounts to invest, objectives, and personal circumstances. The objective of gold ownership is not to achieve income generation, medical breakthroughs, technological advancement, or powerful brand positioning, which, after all, represent the primary function of investment in financial assets. Gold’s chief advantage in portfolios may be psychological as much as financial, stemming from its store of value characteristics and perceptions that it is the “currency of last resort.”


Disclosures: Towerpoint Wealth is a Registered Investment Advisor. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Towerpoint Wealth and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Towerpoint Wealth unless a client service agreement is in place. No portion of any content within this commentary is to be interpreted as a testimonial or endorsement of Towerpoint Wealth investment advisory services and it is not known whether any clients referenced herein approve of Towerpoint Wealth or its services; nor should it be assumed that any references to our clients are representative of all our clients’ experiences. 

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Surviving the Great Indoors!

We hope this edition of Trending Today finds you safe and healthy during this universally disrupted and challenging time. However, it is always important to maintain levity and find humor within these temporary circumstances: 

At Towerpoint Wealth, we have been relentless in communicating with and directly helping clients and colleagues navigate the myriad of financial considerations, risks, and opportunities during these extremely uncertain times, and remain steadfast in helping you reach the goal of achieving complete economic peace of mind. For some specific perspectives on what is happening in the world of finance and the markets, we have included two excellent resources at the bottom of this email. Additionally, our President, Joseph Eschleman, was recently featured in a coronavirus-focused profile on AdvisorHub – click HERE to read the article and see what he had to say.

However, we would also like to try to give you a little personal peace of mind. The jokes about toilet paper are wearing thin, we are frustrated we still cannot sit in our favorite restaurants, breweries, and wineries, and saddened that our trips have been cancelled and our health clubs closed. While all signs point to quarantine being the right thing to do, it is also important to recognize how difficult, challenging, tiresome, and exasperating this all is.

Queen Elizabeth II, whose son and Prime Minister both have the virus, said: “Though self-isolating may at times be hard, many people of all faiths, and of none, are discovering that it presents an opportunity to slow down, pause, and reflect.”

So in lieu of serving up a heavy dose of COVID-19 and economic commentary, we felt taking a different approach to this edition of Trending Today would be useful and fun. Below you will find a vast array of resources meant to help ease some of your physical and emotional discomforts, and perhaps help you to still enjoy that favorite meal, workout, museum, or concert!

What have we left off? Please email us at with your own ideas, resources, etc. – we would love to hear from you, and crowdsource v2.0 of this list!


Food Delivery Services

Farmer’s markets – They’re open!


Music / Podcasts

Mother Nature

Mental Health & Brain Games 


Family Support


Online Museum & Zoo Tours




To paraphrase The Queen: It is important to take comfort that, though we have more to endure, better days are set to return. We will be with our full families again. We will be with our friends and colleagues again. And we will be together again. As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us any time (916-405-9140, with any questions, concerns, or needs you may have. The world continues to be an extremely complicated place, and we are here for you.

Nathan, Raquel, Steve, Joseph, Lori, and Jonathan

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If You Give, We Will Match – It’s Time to Step Up

Needless to say, the coronavirus crisis is profoundly reshaping life here in America. We are sending you this edition of Trending Today with a deep sense of concern and responsibility, understanding the challenges and complications that this unprecedented health epidemic has created for virtually all of us. While we are 100% confident the situation we are all part of is a temporary one, it also remains very serious and open-ended.

If you are an essential worker, or on the front lines of this battle helping our daily lives to be as normal and as safe as they can be, we offer a huge dose of appreciation and a sincere thank you.

If you are sheltering-in-place by yourself or with family, we hope you are coping, making due, and working to make lemonade out of these temporary lemons. At Towerpoint Wealth, we fully understand that being physically separated from family we love and friends we cherish is both trying and difficult. We share those same feelings here at the firm, as the TPW family misses each other as well. While our daily Zoom video conferences have been productive and useful, it is near impossible to replicate the satisfaction and enjoyment we all get, and sincere connection we all feel, from spending physical time with each other at our downtown headquarters.

Understanding these unique circumstances we are all now a part of, we have drawn inspiration in many ways and from many sources. And regardless of your faith, we felt Pope Francis’ words, delivered just yesterday to an eerily empty St. Peter’s Square at the Vatican, ring perfectly true:

We have realized that we are on the same boat, all of us fragile and disoriented, but at the same time important and needed, all of us called to row together, each of us in need of comforting the other… We have realized that we cannot go on thinking of ourselves, but only together we can do this.

Fortunately, tough times do not last, but tough people do. And in that spirit, Towerpoint Wealth is committed to directly helping those in need during this pandemic, and we are pleased to offer a 100% match, up to a total of $50,000, of any COVID-19-related charitable donation made by you!

While we all have access to Google, here is a head start:

  • Click HERE to begin a Charity Navigator search of highly rated charities that have created funds to support communities throughout the world affected by the outbreak.
  • On a more local level, click HERE to head to Donate4Sacramento, the Capital Region’s primary COVID-19 regional response fund, with a mission of providing relief support in five primary ways: Support for Families, Support for Small Businesses, Support for Our Unhoused Neighbors, Nonprofit Support, and General Support.
  • Click HERE for the Salvation Army’s COVID-19 initiative. 

Regardless of where or how much you decide to give, please simply email us your donation receipt at, and we will promptly email you our matching donation receipt within 48 hours.

Lastly, and as always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us ( with any questions, concerns, or needs you may have. The world continues to be an extremely complicated place, and we are here for you.

Nathan, Raquel, Steve, Joseph, Lori, and Jonathan

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Ready to Break Free from Being an Employee?

Welcome to the first edition of The Independent, our new monthly newsletter dedicated to providing Sacramento-area financial advisors with timely and cutting-edge wealth management industry-specific news, content, and information that focuses on the benefits and considerations associated with independence.

Of all the moves made by financial advisors in 2019 – according to industry recruiter Diamond Consultants – only 16% were wirehouse-to-wirehouse transitions. A full 38% chose quasi-independence, and a remarkable 46% went the route of full independence. Wealth and financial advisors know it, and each of the major Wall Street wirehouses do as well. Independence is no longer a trend, but a full-blown movement:

After spending 18 years at a major Wall Street wirehouse, we have been “unshackled” and are fully independent here at Towerpoint Wealth for almost three years now. Releasing The Independent represents another step in the leadership position we have taken in the greater Sacramento-area, educating the financial advisor community on the many facets of becoming independent, as well as managing and operating an independent wealth management practice. And, we are always looking to meet advisors and teams looking to explore independence, and firms looking to gain scale via M&A.

Recognizing that time is valuable and content is king, we will source only the most topical, useful, and interesting stories associated with being a financial advisor in Sacramento for you to peruse once a month.

In the inaugural edition of The Independent you will find:

  • Podcast: Go Independent Without Building It All Yourself
  • Anywhere But Here: Why Wirehouse Advisors Jump to Other Channels
  • Potential Pay Cuts Abound in Wirehouse 2020 Comp Plans
  • Merrill Lynch’s Carrot-and-Stick Grid Cuts Pay for 33% of its Advisors
  • As Wirehouses Change, the Advisor is No Longer King
  • Wells Fargo Doubles Minimum Requirement for Account Fee Waiver
  • The Legal Risks of Failing to Disclose Up-Front Bonuses
  • SEC Charges Sacramento-area Financial Adviser and Radio Host Keith Springer with Fraud

As you know, if it was easy being a financial advisor, everybody would do it, because it is truly a great job. But, understanding how difficult it is to manage our clients, our practices, our emotions, our employers (if you are a “W-2er”), and our professional options, we aim to have The Independent be a small but consistent resource in your busy lives.

We encourage you to forward The Independent to any colleagues of yours who would enjoy or benefit from it, and also encourage you to connect with us on social media – we would like to hear what is on your mind!

  • Please click the “thumbs up” icon on our homepage to join us our community on Facebook:
  • Click HERE to connect with us on LinkedIn 
  • Click HERE to follow us on Twitter 
  • Click HERE to follow us on Instagram 

Finally, if you have feedback or suggestions regarding other interesting local or national topics, please email us at We look forward to being a resource for you and getting to know you better.

Joseph Eschleman, President
Towerpoint Wealth, LLC
Sacramento, CA
Est. 2017