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Purpose Financial Planning

Purpose Update


7-27 20 Update

Please spread the word, the Des Plaines Chamber is putting on a great program for our veterans looking for a job and career. At the end of this ‘bootcamp’ attendees will have received a career enhancement package worth more than $8,000 in valuable goods (including a laptop) and training.

Markets Update

While the markets moved down last week, they have predominately been staying strong when you consider how drastic of a hit our economy and corporate profits have taken.  The market appears to be strengthened by news regarding progress on development of a vaccine for the COV19 virus as well as the assumption we will receive additional fiscal stimulus/support from our government. As of this writing there is optimism around the enacting of a bill to do this soon. This follows a recent European Union passing a $2 trillion stimulus bill so it would seem that there will be no shortage of money in the system.

While drastic action has needed to be taken it is important that for us as investors and taxpayers to understand that we are borrowing from the future through government deficits.  Government transfer payments in April and May, combined, were up 86.7% from a year ago due to COVID spending on “tax relief” checks that have been sent out by the IRS, as well as a surge in unemployment compensation, mostly because of more people collecting increased benefits.    

As a result, government transfer payments made up 30.6% of all personal income in April and 26.4% in May.  Comparatively, from 2015 through February 2020, government transfers averaged roughly 17% of all consumer income.  Prior to the Panic of 2008, transfer payments averaged 14%.  This year, government transfer payments have been so generous that they have offset declines in wages & salaries.      

As I mentioned in prior updates, the result of this borrowing on the future has begun to show in the value of the dollar. While currencies ebb and flow for a number of reasons, simply adding more dollars to our supply without an increase in demand would tend to cause their value to depreciate. One asset class that has benefited from this is gold as I mentioned in last week’s update.

Vaccines Update

 There are 25 COVID-19 vaccines in the clinic and more than 141 in development as of this writing.  Research from Ali Urman with ARK Research states that among the challenges with COVID-19 vaccines are variations among platforms and data. Here are some excerpts from the research “Variances among cell cultures, doses, and titers have focused the FDA and Operation Warp Speed on standardization. Moderna, for example, excluded the most vulnerable population, those 55 years and older, from its trials while most others have targeted primarily Caucasians, making it difficult to generalize results.

… During the next few months, Moderna, Pfizer/BioNTech, and AstraZeneca/Oxford will enter Phase III trials, hoping to recruit more than 130,000 patients for a first dose and then 30 days later a second dose.  …This week, the FDA also announced that it will require six months of safety data before it will approve a vaccine, suggesting that a vaccine broadly available in 2020 or early 2021 may be unlikely, though emergency use authorization appears possible.”

Please contact Dan Kaibel CFP at (773) 466-2610 with any questions.

The opinions expressed in this email are for general information only and are not intended to provide specific advice or recommendation for any individual. To determine which investment(s) or strategies may be appropriate for you, please consult your financial advisor prior to acting.  Investments and financial products can carry risk of loss including loss of principal. Past performance is not a guarantee of future results. The comments made are provided as a general source of information based on information available as of June 23, 2020 and should not be considered as investment advice or an offer or solicitations to buy and/or sell securities. Every effort has been made to ensure accuracy at the time of publication however, accuracy cannot be guaranteed.