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Letters category: Letters

The Day After September 3, 2021
Downloads: The-Day-After.pdf

Remembering September 11…and the Day After

This month, we observe the twentieth anniversary of the September 11 attacks.  But there’s another day we feel we should be observing, too.  The Day After.  September 12.

Now, what’s so special about this day, you ask?  It’s simple.  If September 11 was the day America was hurt, September 12 was the day America began to heal.

It’s been a long road for our country since then.  So much has happened, so much has changed.  One of those changes, in my opinion, is the role September 11 plays in our lives…and the place it holds in our hearts.

You see, when those nineteen terrorists seized the planes, they were trying to drive a wedge through the heart of America.  They wanted every American to feel terror and hatred.  And it worked – but only for a short time.  Because even though the towers fell, something happened after September 11 that they couldn’t anticipate.  Something far too powerful for them to ever destroy.

That thing was September 12.

On September 12, firefighters rescued two survivors who were buried beneath the rubble, even after all hope of finding survivors was lost.

On September 12, workers began the monumental task of cleaning and then rebuilding Ground Zero.

On September 12, candlelight vigils were held in Union Square, Central Park, and locations around the country.

On September 12, other nations played The Star-Spangled Banner in honor of the United States.

On September 12, parents everywhere hugged their children close and whispered, “I love you.”

On September 12, spouses held hands and gave thanks for what they had.

On September 12, the country began to heal.

Since then, we remember September 11 differently than the terrorists wanted us to.  Yes, we still feel sadness for those who lost their lives, or who lost loved ones.  But every September 11, we spend more time marveling at the bravery and heroism of those in the towers and on the ground; in the planes and the Pentagon.  We spend more time reaffirming our love for those around us.  We spend more time reflecting on the rights and freedoms we enjoy.

We spend more time being grateful for our country.

All of us, we think, have at some point wondered, “Why?”  Why did September 11 happen?  Why did such a tragedy occur?  Why is there evil in the world?  But at some point, those questions recede into the background.  Anger and bewilderment over the past fade…replaced by hope for the future.

As Brian Clark, a survivor of the World Trade Center, once said:

“Why am I here?  What is the reason I was saved?  They’re really unanswerable questions.  After going through something like I did, all you can do is try to live your best life from day to day and move forward with gratitude.”1

No terrorist in the world could stop America from healing…or her people from moving forward with gratitude.  Twenty years later, that, to us, is the legacy of September 11.  That is why we will always remember that fateful day.

And it’s why we will always remember September 12.

On behalf of our entire team, we wish you a safe and peaceful September 11…and a hope-filled September 12.  May we never forget.

Sincerely,

Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

1 “9/11 Survivors Reflect on Their Miraculous Escape,” People Magazine, September 11, 2017.  https://people.com/human-interest/911-survivors-reflect-escape-south-tower/

Independence Rock July 2, 2021
Downloads: Independence-Rock.pdf

On July 4, 1852, a young man named Ezra Meeker found himself staring up at a huge granite monolith in central Wyoming.  It was called Independence Rock, partially because westward-bound pioneers, like Ezra, knew that if they made it to this landmark on or before Independence Day, they stood a good chance of reaching their destination before winter came.

That day, Ezra was more concerned about keeping his wife and newborn baby alive than anything else, but he and the other pioneers in the area did take the opportunity to celebrate Independence Day.  He also took the time to carve his name into the rock, like hundreds had before him, and hundreds would after.  Then, he continued his way along the Oregon Trail.

In 1906, fifty-four years later, Ezra Meeker found himself concerned that the nation’s memories of the Oregon Trail were beginning to fade.  So, despite being 75 years old, he set out again, retracing his exact steps along the trail in an actual covered wagon.  Along the way, he set markers and tablets, designating important landmarks and milestones.  And once again, on July 4, he found himself staring up at Independence Rock.  He was no longer able to climb to the top, as he could in his younger days, but he still inscribed a message for future generations to read:

The Old Oregon Trail, 1843-57

In 1916, now 85, Meeker traveled the trail again –this time in a Pathfinder automobile.  Although the car was an absolute relic by modern standards, Meeker was probably amazed at how much faster and easier the route was compared to when he walked it on his own two feet.  Along the way, he became one of the first advocates for a national highway system, so that every American could travel the width and breadth of our country.

The years passed.  Technology improved.  The country changed.  But Meeker kept on traveling.  And for his last trip over the Old Oregon Trail, in 1924 at the grand age of 93, Meeker finally did it in style – in an airplane.

Between Meeker’s birth and his death, America celebrated 97 birthdays.  We’re sure Meeker was astonished at how much the nation changed during that time.  It expanded, going from 30 states to 48.  It grew, going from roughly 13 million people to over 120 million.  It mechanized, with horses and covered wagons being replaced by trains, then cars, and finally aircraft.  It modernized, thanks to the invention of the camera and the film projector.  When Meeker was born, the telegraph was just coming into use.  During his life, he would witness the birth of both the phone and the radio.  (In fact, Meeker made an appearance on the radio one year before he died.  He declared it a “new and wondrous invention.”1)

Most of all, the country progressed.  During Meeker’s life, slavery ended, women won the right to vote, and children swapped the coal mine for the classroom.

In a few years, America will have celebrated almost 100 more birthdays since Meeker died.  If he were to see America today, we think he would be even more impressed!  Meeker dreamed of a national highway.  Today, we have 70 different interstates.  Meeker appeared on the radio.  Today, we have smartphones.  Meeker flew in an airplane.  Today, we have spacecraft.  48 states have become 50; 120 million people have become 330 million.

When the pioneers reached Independence Rock on the 4th of July, they couldn’t possibly fathom how their country would change over the decades.  Now, as we celebrate another birthday for our great nation, we wonder how it will continue to change.  What amazing new inventions await us?  What progress will we make, and our children after us?

There are many reasons to be grateful for the United States of America.  But high at the top of our list is that we live in a country that is constantly changing, constantly moving, constantly growing.  America never stands still.  Neither do her people.  That was true in Ezra Meeker’s day, and it’s true in ours.

And for that, we are grateful.

So, happy birthday America!  We can’t wait to see where you’ll go – and how you’ll grow – next.  And to you, we wish a very happy Independence Day!

Sincerely,

Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

1 “Meeker, Ezra,” HistoryLink.org, 5/02/2006.  https://www.historylink.org/file/7737

Honor Our Fathers June 16, 2021
Downloads: Honor-Our-Fathers.pdf

As you know, the world is full of important people.  From presidents to scientists to singers, all celebrities influence our culture in different ways.  But when it comes to us as individuals, there are few people more influential than our fathers.  Fathers inspire us, guide us, and motivate us.  They not only shape who we are, but also what we will become.  Their impact can even be felt long after they’re gone.

Take the story of Rivaldo Vitor Borba Ferreira … or just Rivaldo for short.  Rivaldo is a retired Brazilian soccer player, famous the world over for the goals he scored, the trophies he won, and the skill he displayed.  But that’s not what makes his story so compelling … nor is it what this letter is about.  This letter is not about Rivaldo the athlete, but Rivaldo the father and Rivaldo the son.  It’s about family.

Rivaldo spent his childhood in Recife, a city on Brazil’s northeast coast.  Like most cities, Recife has both its glamor side and its less glamorous side, and it was the latter where Rivaldo was raised, in the favelas (Portuguese for slums) of the giant port city.

Soccer has always been huge in Brazil’s metropolitan areas, especially in the poorer quarters.  That’s because, for children growing up in a favela, soccer is more than just a game—it’s a means of escape.  Rivaldo spent most of his days selling souvenirs to tourists in order to bring money home for his family, before devoting his nights to kicking a ball around on the beach.  But while playing with his friends was fun, it wasn’t enough to stave off the effects of poverty and hunger.  Rivaldo and his four siblings all suffered greatly, especially due to malnutrition.  Even today, as a famous and successful athlete, Rivaldo still seems unable to cast off the physical effects of malnutrition.  His face and frame are still as gaunt as ever, and he’s worn dentures for years—the hunger he suffered as a child made his teeth fall out.

Hence, soccer: the only way to forget the pangs of an empty belly.  When the tourists went inside their hotels to sleep, Rivaldo could play, run, and dream; dreams of playing before thousands of adoring fans.  Dreams of playing like the legends he saw on television, dreams of a better, safer, easier life.  But to Rivaldo, they were only dreams.  “I never really thought I could be that good,” he once said.1

But one person did believe: his father, Romildo.  The two were very close.  Romildo had his own dreams, too: dreams of a real escape from the slums, not just a fantasy one.  He encouraged his three sons to train hard and get better at the sport they all loved.  It was their best hope at a better life.  “He always said to us that one of the three brothers would be a professional footballer,” Rivaldo recalled in an interview.1

But when Rivaldo was 16, his number one fan was taken away forever.  His father was killed in a car accident.  Rivaldo was devastated.

Without his father, soccer meant nothing anymore, and he went a whole month without playing.  But his mother begged him to continue, saying, “You can’t give up now.  You must make your father’s dream come true.”1

So Rivaldo the son kept on playing for Romildo the father.  And he worked, even going so far as to walk ten miles by himself almost every night in order to train with his team.  He couldn’t afford a bus.  But through it all, he once said, “My father never left my side; on the street, on the beach, he was always with me.  He helped me on the road to becoming a professional, and now I play just for him.”1

And what a professional he was!  By the age of twenty, Rivaldo had turned pro.  Soon he was playing for one of the biggest teams in Brazil.  By his mid-twenties, Europe was calling.  Rivaldo spent over a decade playing overseas, including a stint at Barcelona, one of the biggest teams in the world.  He made more money than he ever thought possible, and listened as tens of thousands of fans chanted his name.  Just like in his dreams.  Just like in his father’s.

In 1999, he was officially named the best player in the world.  Three years later, he won the World Cup with Brazil.

Despite his success, he never forgot his background.  He founded his own charity, and always donated a part of his wages to help the children who looked up to him the way he had looked up to the legends of his own youth.  He also started a family of his own.  Rivaldo the son had become Rivaldo the father.

One of his sons is named Rivaldinho, Portuguese for “little Rivaldo.”  True to his namesake, Rivaldinho is a soccer talent, too, currently playing for a team called Mogi Mirim EC, one of the first teams his father played for … and the last.

Rivaldo’s long road out of the slums passed a new milestone on February 19th, 2014.2  Forty-one years old, Rivaldo returned home and signed with Mogi Mirim.  On the aforementioned date, ten minutes into the second half, Rivaldo came off the bench and joined his eighteen-year-old son on the pitch for an official game.  They played together for just over half an hour inside the Estadio Romildo Ferreira … the stadium named after Rivaldo’s father, Romildo.

“I thank God for this moment,” Rivaldo said afterward, shortly before retiring.  “I am really happy to have played with my son.”3

Once upon a time, he had wanted to quit.  But Rivaldo the son kept playing for his father, so that, in the end, Rivaldo the father could play with his son.

From all of us here at Hudock Capital Group, Happy Father’s Day!  Thank you to all fathers everywhere!

Sincerely,

Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

1 “Rivaldo: In the name of the father,” FIFA.com, February 1, 2000.  http://www.fifa.com/ballondor/archive/edition=1999901999/news/newsid=74934/index.html

2 Matthew Nash, “Rivaldo and son Rivaldinho play at Rivaldo Stadium,” Metro, February 19, 2014.  http://metro.co.uk/2014/02/19/rivaldo-makes-history-by-joining-son-in-brazilian-league-action-at-the-age-of-41-4309839/

3 “Rivaldo and Rivaldinho play together,” Marca, February 19, 2014.  http://www.marca.com/2014/02/19/en/football/international_football/1392844760.html

A Message from President Eisenhower May 26, 2021
Downloads: A-Message-from-President-Eisenhower.pdf

When I was young, I remember asking my parents why we observe Memorial Day.  While some people use it mainly as a chance to throw a backyard BBQ, others take the time to visit cemeteries, pour over old photographs, or read the stories of those who died serving our country.

“But why?” I wanted to know.  It seemed like such a sad holiday.  Why do we do it?

That’s when my parents showed me something I’ll never forget.  It’s a speech given by President Dwight Eisenhower – and if there’s any president who understood the “why” of Memorial Day, it was surely Ike.  It’s an extremely short speech, just 250 words.  But those words made me realize why Memorial Day is so important.

In honor of this Memorial Day, I’d like to share those words with you right now.

Whereas the bodies of our war dead lie buried in hallowed plots throughout the land, and it has long been our custom to decorate their graves on Memorial Day in token of our respect for them as beloved friends and kinsmen and of our aspiration that war may be removed from the earth forever; and

Whereas it is fitting that, while remembering the sacrifices of our countrymen, we join in united prayers to Almighty God for peace on earth; and

Whereas the Congress, in a joint resolution approved May 11, 1950, provided that Memorial Day should thenceforth be set aside nationally as a day of prayer for permanent peace and requested that the President issue a proclamation calling upon the people of the United States to observe each Memorial Day in that manner:

Now, Therefore, I, Dwight D. Eisenhower, President of the United States of America, do hereby proclaim Memorial Day, Saturday, May 30, 1953, as a day of prayer for permanent peace, and I designate the hour beginning at eleven o’clock in the morning of that day, Eastern Daylight Saving Time, as a period in which all the people of the Nation, each according to his religious faith, may unite in solemn prayer.

Let us make that day one of twofold dedication. Let us reverently honor those who have fallen in war, and rededicate ourselves to the cause of peace, to the end that the day may come when we shall never have another war—never another Unknown Soldier.1

Read that last paragraph again.

Let us make that day one of twofold dedication. Let us reverently honor those who have fallen in war, and rededicate ourselves to the cause of peace, to the end that the day may come when we shall never have another war—never another Unknown Soldier.

That’s why.  That’s why Memorial Day is so important.

You see, it’s not just a holiday.  It’s an opportunity.  By remembering what we have lost, we give thanks for what we have.  By honoring the sacrifice of war, we place an even greater value on the promise of peace.

Like President Eisenhower said, Memorial Day is a day of twofold dedication.  Dedication for those who died.  Dedication for those who, as a result, may yet live.  A day for remembering what was, and a day for looking forward to what may yet be.

Ever since I read those words, Memorial Day has held a special place in my heart.  I’m so grateful for the freedoms we enjoy – and for those who fought to uphold them.  I’m so grateful for this nation we live in – and for those who laid down their lives to protect it.  I’m grateful for everything they did, and everything we can do because of them.

I’m grateful for Memorial Day.

On behalf of everyone at Hudock Capital Group, I wish you a safe and peaceful Memorial Day.

Sincerely,

Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

1 Dwight D. Eisenhower, “Proclamation 3016 – Prayer for Peace, Memorial Day, 1953”.  https://www.presidency.ucsb.edu/documents/proclamation-3016-prayer-for-peace-memorial-day-1953

The Most Important Job May 5, 2021
Downloads: The-Most-Important-Job.pdf

The most important job a person can have is the job of being a mother.

Mothers must be strong to show us the way. They must be firm should the need arise to teach us how to find our feet without falling again.

Mothers must be loving, to teach us what love is all about. They must be sympathetic in our times of need, from losing our first pet to moving away.

Mothers must protect us from the harm that we can experience yet, not hover to the extent we never find the courage to stand alone.

They must be all these things, for the reliability of the next generation lies upon their capable shoulders.

And most of the time, they need to be all of these things at once.

Have a great day!

Happy Mother’s Day!

Sincerely,

Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

Interest Rates and Inflation March 29, 2021
Downloads: Interest-Rates-and-Inflation.pdf

One year.  It seems incredible, but it has been one year since COVID-19 struck our shores.  One year since the World Health Organization declared a pandemic.  One year since the markets crashed and the schools closed, and we realized just how much we take toilet paper for granted.

Since then, the markets have recovered and risen to new heights.  The economy, meanwhile, has recovered more slowly.  Now, a quarter of the way through 2021, we have a new president, several new vaccines, and a completely different world than the one we knew before all this started.  We have also seen some renewed volatility in recent weeks.  This has many of my clients asking, “Where are the markets going next?  What should we expect for the rest of 2021?”

We’ll address those questions in this letter.

As you know, there are two types of long-term market situations: Bull markets and bear markets.  But the whole “bull vs bear” concept can also be used to describe two types of investor sentiment.  Bulls are investors who have a positive, or “bullish”, view of where the markets are headed.  Bears, meanwhile, generally have negative, or “bearish” expectations.  So, in this letter, we’re going to let both animals debate each other, each presenting their case for why the markets will have a positive year or a negative one.  We’ll start with the Bull, move onto the Bear, and then give the Bull a chance for a short rebuttal.  Finally, as your financial professionals, we’ll give you our view.

The Bullish View

Last year’s market crash was sudden, swift, and deep.  But in the grand scheme of things, it didn’t last very long.  In fact, it took only six months for the markets to recover.  (By contrast, it took the markets almost six years to recover after the Great Recession.)  Since then, the markets have risen to new highs.

Three things propelled the markets to this remarkable turnaround: Low interest rates, federal stimulus, and the expectation of a major economic recovery.  Let’s start with the first one.  To help juice up the economy, the Federal Reserve lowered interest rates to a historic degree.  Low interest rates promote more borrowing and spending, two pillars our economy is based on.  They also help people buy homes and encourage businesses to invest more in themselves.  (Including hiring more workers.)

Congress, meanwhile, has passed three major stimulus packages in the last year.  The most recent bill was signed by President Biden on March 11.  The America Rescue Plan Act of 2021, as it’s called, provides $1.9 trillion in aid for both businesses and consumers.1  Among other things, the Act extends COVID unemployment benefits through Labor Day, provides $1,400 direct payments to individuals, expands certain tax credits, and grants billions to small businesses to help meet payroll and retain workers.1  The first two stimulus packages had a positive impact on things like retail sales and consumer spending, and it’s widely expected that this one will, too.

This combination of low interest rates and government stimulus have helped the economy tread water while we deal with the virus.  But much of the market’s rise is due to something else: Expectation.  Specifically, expectation that the pandemic will end, and the economy will hit the accelerator. As more people are vaccinated and case numbers fall, the thinking goes, more and more of society will re-open, releasing a flood of pent-up demand.  Demand to travel, to eat out, to catch a movie in theaters, you name it.  Add the latest round of stimulus to the mix, and suddenly Americans have both extra money in their pocket and the means to spend it.  In other words, all the ingredients are there for a major economic comeback, the likes of which we haven’t seen in decades.

Now, we seem closer than ever to that expectation becoming reality.  As of this writing, there are three approved vaccines in the U.S., with more than 115 million doses administered.2   (40 million people are currently considered fully vaccinated, approximately 12.3% of the total population. 2)  Currently, our nation is averaging over 2 million shots each day.2  It’s no surprise, then, that cases in the U.S. have been falling for weeks.  In fact, as of March 19, cases are down over 14% over the last two weeks.3

We’re not out of the woods yet, not by a long shot.  Masks and social distancing will continue to be a part of our lives for some time yet, and of course there are relatively new variants of the coronavirus to deal with.  But if we can maintain this trajectory, increasing the number of people vaccinated and reducing the number of people sick, that could do wonders for our economy.  It could lead to more of society re-opening, leading in turn to more jobs, more consumer spending, and greater company earnings.  Greater earnings, of course, usually lead to higher stock prices.

The Bearish View

So, in light of all this, how can anyone have a negative view of where the markets are headed?  It all comes down to a single word:  Inflation.

Inflation.  It’s a scary-sounding word that conjures up images of German children stacking useless money in the 1920s, or gas rationing in the 1970s.  For decades, economists have monitored it relentlessly.  The Federal Reserve considers managing inflation to be a core aspect of its mission.  That’s partly why our nation’s inflation rate has been relatively stable over the last twenty years.

But recently, some analysts and investors have begun stressing over inflation again.  They don’t deny that the economy is poised to grow.  They just worry that it will grow too much, too fast.  There’s a word for this, too.  Economists call it overheating.

When an economy overheats, it essentially no longer has the capacity to meet all the demand it faces from consumers.  Some producers will simply not be able to supply all the goods their customers want.  Other producers, to keep up with that demand, will be forced to raise prices.  It’s a classic example of the Law of Supply and Demand.  (When the demand for something outpaces its supply, the price goes up.)  For example, if everyone suddenly decides to fly to that vacation spot they’ve been putting off for a year, the cost of air travel would skyrocket.

If the economy were to grow too quickly, prices would rise across the board – and the value of our currency would drop.  This, essentially, is inflation: When the general price level rises, a dollar simply pays for less than it used to.  That makes it much harder for people to buy the goods and services they need.  Or to pay off their debts.  It makes it harder for businesses to hire new workers or pay the workers they already have.  The upshot?  When inflation gets too high, consumer spending plummets, unemployment jumps, and economic booms turn into economic busts.

Some experts worry this is what’s in store in 2021.  They see the economy as a garden hose that’s been tied up into a knot.  Untie the knot – or re-open the economy too quickly – and the water will burst out with sudden, savage force.

So, here’s what this has to do with the stock market.  Normally, the Federal Reserve combats inflation by raising interest rates.  Higher interest rates tend to cool off the economy, because they prompt people to save their money instead of spending or borrowing it.  A cooler economy decreases inflation, and gradually things go back to normal.  The problem is the stock market has become accustomed to the Fed’s low interest, “easy money” policies.  Low interest rates mean that many types of investments, most notably bonds, simply don’t provide the same return on investment as they would in a high-interest rate environment.  That drives more and more investors into the stock market to get the returns they need.  But what happens when interest rates go up?  Consumers and businesses could cut back on spending, which in turn could cause earnings to fall and stock prices to drop.

Fear of inflation, and fear of higher interest rates.  That’s the bearish view in a nutshell.

Rebuttal

We promised the Bull would have the opportunity for a short rebuttal, so here it is.  There are two main reasons for thinking this fear of high interest rates are overblown.  The first is that, even if inflation does go up – which it likely will – we have a lot of room to work with before it becomes a problem.  In 2020, the inflation rate was only 1.2%.4  That’s well below the 2% mark the Fed generally aims for, and nowhere close to the mindboggling numbers we saw in the late 70s and early 80s.  (In 1979, for example, the inflation rate was 13.3%.4)

The other reason is that there’s no reason to assume the Federal Reserve will automatically raise interest rates just because inflation goes up.  Why?  Because the Fed itself has said that it won’t!5  Currently, the Fed sees stimulating the economy and boosting employment to be far bigger priorities than tamping down on inflation, and recently, the Fed Chairman suggested interest rates would remain low at least until 2022.

My View

We’ve told you what the Bulls and Bears think.  So, here’s what we think.  Go watch a video on YouTube and then read the comments.  Ever notice how many people like to say “First”?  In my experience, a lot of investors – be they Bulls or Bears – are like that.  They stress over “getting ahead” or “being first”, and as a result, they overreact to the slightest provocations.

Here at Hudock Capital Group, we don’t worry about being first. We only care about moving forward.  That’s why we focus on one thing: Investing for the long term without trying to guess whether the Bulls or the Bears will dominate.  That means positioning ourselves to take advantage of bull markets while being prepared – mentally and financially – for bears.

Historically, an improving economy leads to a stronger stock market.  If that happens in 2021, wonderful!  But if interest rate fears worsen and volatility goes up, experience has taught us not to overreact.  Remember, we’re not investing for next week, or next month, or next quarter.  We’re investing for years.  Any general rise in prices is likely to be temporary, just as any bouts of volatility are temporary, too.

It’s been a year since the pandemic began.  A year since some of the worst market turmoil in a long time.  We got through that by being disciplined and patient, and we’ve been rewarded.  So, that’s what we’ll continue to do.  Other investors can worry about being a Bull, or a Bear, or “first”.  We’ll just continue being disciplined and patient.

If you have any questions or concerns about the market, please feel free to contact me.  In the meantime, enjoy the upcoming spring season!

Sincerely,

Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

1“The American Rescue Plan Act Greatly Expands Benefits through the Tax Code in 2021,” Tax Foundation, March 12, 2021.  https://taxfoundation.org/american-rescue-plan-covid-relief/

2 “How is the COVID-19 Vaccination Campaign Going In Your State?” NPR, March 19, 2021.  https://www.npr.org/sections/health-shots/2021/01/28/960901166/how-is-the-covid-19-vaccination-campaign-going-in-your-state

3 “How Severe is Your State’s Coronavirus Outbreak?” NPR, March 19, 2021.  https://www.npr.org/sections/health-shots/2020/09/01/816707182/map-tracking-the-spread-of-the-coronavirus-in-the-u-s

4 “US Inflation Rate by Year,” The Balance, March 1, 2021. https://www.thebalance.com/u-s-inflation-rate-history-by-year-and-forecast-3306093

5 “Powell Confirms Fed to Maintain Easy Money Policies, The Wall Street Journal, March 4, 2021.  https://www.wsj.com/articles/feds-powell-to-take-questions-on-job-market-interest-rates-bond-yields-11614872817

This material was prepared by Bill Good Marketing.

Hope-Faith-Love-and-Luck… March 12, 2021
Downloads: St.-Patricks-Day-Letter-2021.pdf

As you know, the four-leaf clover has become a common symbol of St. Patrick’s Day.  Because four-leaf clovers are so rare — you have about a 1-in-5000 chance of finding one1 — they’re often associated with luck.  But in truth, each leaf represents something special: luck, yes, but also hope, faith, and love.

The reason we mention this is because, over the years, we’ve learned that the history of St. Patrick’s Day represents each of these attributes, too.  Now, that might seem pretty deep for a day where we all pinch each other for not wearing green.  But it’s true!  To illustrate how, let’s take each clover leaf one at a time, starting with…

Hope

Did you know that, in an alternate universe, we might all be wearing blue on St. Patrick’s Day?  While “kelly green” is the most popular symbol associated with the day, it didn’t used to be that way.  Saint Patrick himself is thought to have worn blue for much of his life, and the Order of St. Patrick, a fraternity of knights founded in the 17th century, adopted the color, too.

So why the color green?  Because green was the color of those who sought Irish independence.  Beginning in that same century, more and more Irish people began hoping that one day, they would have their own country, free of dominion under a foreign crown.  These patriots increasingly wore green as a symbol of Irish identity and culture.  It would take centuries for independence to happen, but generation upon generation passed down the secret hope that one day, Ireland would be counted among the free nations of the world.

So why green, exactly?  It all has to do with another symbol associated with both Ireland and Saint Patrick: the shamrock.

Faith

Although they are often confused, shamrocks and four-leaf clovers are not the same thing.  Shamrocks are standard three-leaf clovers.  What makes them special is not how many leaves they have, but what they represent.  In the late 1700s and early 1800s, Irish revolutionaries adopted the green shamrock as their emblem.  They included shamrocks on their uniforms, their flags, and in their songs.  Eventually, the shamrock became the de facto symbol of Ireland itself.

The shamrock’s importance goes back over 1500 years – all the way to Saint Patrick himself.  Legend has it that when Patrick first began preaching Christianity in Ireland, he used the shamrock to illustrate the concept of the Holy Trinity.  Patrick’s message of putting faith in God resonated, and he reportedly baptized thousands of people.

Over time, Patrick became the patron saint of Ireland, and eventually, like the shamrock, a symbol of Ireland itself.

Love

Just as Ireland’s symbols have changed over time, St. Patrick’s Day itself has changed, too.  Now, it’s not only a celebration of the saint, but of all things Irish.  That’s important, because Patrick is not the only patron saint of Ireland.  Another is Brigid of Kildare – a remarkable woman, and quite possibly, someone who knew Patrick well.

Brigid was born into slavery in the 450s.  (The parallels to Patrick are interesting because Patrick was also a slave for many years.)  From an early age, Brigid showed amazing love for those who had less than her.  She never passed up an opportunity to feed, heal, or comfort the poor.  Some stories claim she could replenish by praying to God.  Other stories, less religious but just as interesting, tell of the time when she gave away her master’s entire store of butter.  Furious, her master tried to sell her to a king.  While he bartered, Brigid gave away his jeweled sword to a beggar so he could sell it to buy food.  When the king saw this, he took it as a sign that she was holy and commanded her master to set her free.

As she grew older, Brigid decided to devote her life to charity.  She founded her own monastery and worked tirelessly to ensure that women and the poor had a safe place to worship.  She even founded Ireland’s first art school!  One of the earliest books about Patrick said, “Between Saint Patrick and Saint Brigid, the pillars of the Irish people, there was so great a friendship of charity that they had but one heart and one mind.”2  When Brigid died in 525, she left behind an incredible legacy of compassion, charity, and most of all, love.

Luck

“The Luck of the Irish” has become a common phrase.  It means to have extremely good fortune, but the saying originated in America, not Ireland – and it was initially meant to be a slight, not a compliment.  Here’s how Edward T. O’Donnell, author of 1001 Things Everyone Should Know About Irish American History, puts it:

“During the gold rush years…a number of the most successful miners were of Irish and Irish American birth.  Over time this association of the Irish with mining fortunes led to the expression ‘luck of the Irish.’  Of course, it carried with it a certain tone of derision, as if to say, only by sheer luck, as opposed to brains, could these fools succeed.”3

As the decades passed, though, the opposite became true.  “Luck of the Irish” now often refers to someone who has succeeded through their wits, their cleverness, and their perseverance.  And given how much Irish immigrants have had to overcome over the centuries – including both prejudice and economic hardship – we’d say those qualities describe the Irish people pretty well!

As you can see, there’s more to St. Patrick’s Day than simply throwing on a green shirt or eating corned beef.  St. Patrick’s Day represents the hope, faith, love, and perseverance of an entire people.  It’s a day for all of us to practice those things as well.  A day for us all to treasure and enjoy.

On behalf of our entire team, we wish you a happy St. Patrick’s Day!

Sincerely,

Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

1“How rare are four-leaf clovers really?” share the luck, 2017.  https://www.sharetheluck.ch/single-post/How-rare-are-four-leaf-clovers-really

2 “Brigid of Kildare,” Wikipedia, https://en.wikipedia.org/wiki/Brigid_of_Kildare

3 Edward T. O’Donnell, “1001 Things Everyone Should Know About Irish American History,” Broadway, February 26, 2002.

Presidents Day – We Are All Mortal February 10, 2021
Downloads: Presidents-Day-We-Are-All-Mortal.pdf

Happy Presidents’ Day!

Once upon a time, the topic of “who sits in the White House” was not nearly so inflammatory as it is today.  Of course, people have always had different political opinions.  But in recent years, it seems like our differences have become far more of a talking point than the things we have in common.

Whether it’s our political beliefs, our skin colors, our ethnicities, our religions, our respective life experiences, or even which sports teams we root for, the things that make us different too often end up dividing us.  You only have to go online for a few minutes to see how much anger and derision exist in our country today – because we too often focus on our differences instead of what we have in common.

With Presidents’ Day coming up, we decided to take a trip into history to see how past presidents have addressed this.  That’s how we came across a speech by John F. Kennedy in 1963.  In his address, President Kennedy talked about the concept of world peace and what it would take to actually achieve it.  High on the list, he explained, was the idea that we should focus more on what unites us than on what divides us.

Here’s an excerpt of what he said.  To us, it’s one of the most important sentiments any president has ever expressed.

“Let us not be blind to our differences–but let us also direct attention to our common interests and to the means by which those differences can be resolved. And if we cannot end now our differences, at least we can help make the world safe for diversity. For, in the final analysis, our most basic common link is that we all inhabit this small planet. We all breathe the same air. We all cherish our children’s future. And we are all mortal.”1

We don’t live in the Cold War, as he did, but we do live in an equally uncertain era.  An era in which even minor disputes can feel like unbridgeable divides.  But as President Kennedy went on to say, it’s our responsibility as American citizens to bridge those divides.  To heal those hurts.  To see the good in others and build off that.

“My fellow Americans, let us examine our attitude toward peace and freedom here at home.  The quality and spirit of our own society must justify and support our efforts abroad.  We must show it in the dedication of our own lives.  [For] wherever we are, we must all, in our daily lives, live up to the age-old faith that peace and freedom walk together.  In too many of our cities today, the peace is not secure because the freedom is incomplete.

It is the responsibility of the executive branch at all levels of government – local, State, and National – to provide and protect that freedom for all our citizens by all means within their authority. It is the responsibility of the legislative branch, wherever that authority is not adequate, to make it adequate. And it is the responsibility of all citizens in all sections of this country to respect the rights of all others and to respect the law of the land. 1

Kennedy was far from the only president to address this issue, of course.  Over twenty years later, President Ronald Reagan would say this, in a speech given on July 4, 1986:

“All through our history, our Presidents and leaders have spoken of national unity and warned us that the real obstacle to moving forward the boundaries of freedom, the only permanent danger to the hope that is America, comes from within.  It was their last gift to us, this lesson in brotherhood, in tolerance for each other, this insight into America’s strength as a nation.

“My fellow Americans, it falls to us to keep faith with them and all the great Americans of our past. Believe me, if there’s one impression I carry with me after the privilege of holding for five-and-a-half years the office held by Adams and Jefferson and Lincoln, it is this: that the things that unite us — America’s past of which we’re so proud, our hopes and aspirations for the future of the world and this much-loved country — these things far outweigh what little divides us. And so…we reaffirm that Jew and gentile, we are one nation under God; that black and white, we are one nation indivisible; that Republican and Democrat, we are all Americans. …With heart and hand, through whatever trial and travail, we pledge ourselves to each other and to the cause of human freedom, the cause that has given light to this land and hope to the world.”2

What if this Presidents’ Day, we all did our best to see each other the way Kennedy and Reagan urged us to?  To not be blind to our differences, but to put more stock in what we have in common.  To remember that we all must share this planet together.  That we all breathe and dream and love.  That we are all doing the best we can.  That we are all mortal.

What if we did it not just on Presidents’ Day, but every day?  What kind of nation would we live in then?  What kind of nation would we leave to our children?  It would be a better one, we suspect, than the one we live in now.  So, this Presidents’ Day, that’s just what we intend to do.  To remember the words of our former presidents…as well as the words from another famous speech:

 

“And so, my fellow Americans: ask not what your country can do for you.  Ask what you can do for your country.”

 

This is something we can do.

We wish you a happy Presidents’ Day!

Sincerely,

Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

1“Commencement Address at American University, Washington, D.C., June 10, 1963.  John F. Kennedy Presidential Library and Museum.  https://www.jfklibrary.org/archives/other-resources/john-f-kennedy-speeches/american-university-19630610

2 “Address to the Nation on Independence Day,” July 4, 1986.  Ronald Reagan Presidential Library and Museum.  https://www.reaganlibrary.gov/archives/speech/address-nation-independence-day

2020 Year in Review January 13, 2021
Downloads: 2020-Year-in-Review.pdf

2020: The Year in Review

Every January, it’s customary to look back at the year that was. What were the highlights? What were the lowlights? What events will we always remember? Most importantly, what did we learn?

Here’s the problem, though: How in the world do you recap a year like 2020? You could write a book about March alone. So, we thought for a long while about everything that happened last year and decided to focus on three important lessons that we as investors can learn from 2020.

The first lesson has to do with…

The Markets. When word began leaking out about a new viral epidemic in China, the markets didn’t really know how to react. Would this go away in a few weeks and be nothing more than a footnote in history? Or would it be like the SARS epidemic of 2002 – terrible, but largely restricted to China? Or would it progress into a full-blown pandemic?

Obviously, we know the answer now. But we didn’t back then.

There’s a well-known saying about collapses and crashes: They happen slowly, then all at once. That’s sort of what the markets experienced in those turbulent few months between January and April. There was some volatility near the end of January, but nothing major. Toward the end of February, as the virus began affecting global supply chains, the volatility got worse. But for all the bad days in the markets, there were plenty of good days, too.

Then came March.

As the virus spread to our shores, as the World Health Organization declared a pandemic, as local governments instituted lockdowns and other restrictions, investors realized several things:
• Lots of people were going to get sick, or even die.
• Many more would lose their jobs.
• The economy was going to fall into a recession.

With startling speed, what had been happening slowly suddenly seemed to happen all at once: The markets crashed. From February 19 to March 23, the S&P 500 fell almost 35%.1 On more than one occasion, trading at the New York Stock Exchange was automatically halted because prices were plummeting so fast. For most investors, it was like nothing they’d ever experienced before. Understandably, fear was rampant.

But not, we’re grateful to say, at Hudock Capital Group.

When speaking on the phone with our clients, our team did our best to emphasize a very important point: While COVID-19 was new and scary, what the markets were doing was actually old and familiar. It’s a classic tale: Something unexpected happens, and the markets panic. We saw it in 2008, during the financial crisis. We saw it in 2001, after September 11. We saw it in 2000, after the dot-com bubble burst. The cause is always different, but the effect is always the same.

When 2020 began, no one could have predicted the pandemic, least of all us. But that something, sometime, would bring the markets down – that was inevitable. That’s why we had already factored that inevitability into our strategy and prepared for how to handle it.

Then, too, we knew that historically, epidemics tend to cause sharp downturns followed by equally sharp recoveries.2 So, our message to clients was simple: All that market madness didn’t mean we should deviate from our existing strategy. Quite the contrary! It meant we should hew to it more closely than ever.

Well, you remember what happened next: The markets recovered, and quickly. Between March 23 and April 14, the S&P 500 rose 27%.1 Before much longer, the markets had regained almost everything they had lost. And while there were further spasms of volatility later in the year, by the end of 2020, the markets had risen to new highs.

That’s why Lesson #1 is simple:

1. No matter what the markets are doing, nothing should ever make us choose panic over our strategy.

To understand the second lesson, let’s first understand something about…

The Economy. As we moved into the summer, many clients asked me the same question: “The markets are up, but the economy is still very, very down. What gives? Should we get out of the markets again?”

It’s a terrific question. Here was our answer:

The markets and the economy are not the same thing. They’re related, but different — and they don’t always move in concert with each other. The economy moves based on activity, like production, consumption, and trade. The markets, on the other hand, move largely on anticipation. When investors expect something will happen, they make decisions based on that expectation. So, when the markets plummeted in February and March, it was based on the expectation that unemployment would rise, consumer spending would fall, and the economy would contract.

All those things happened. But here’s the thing: once they happened, they were already “priced in” to the markets. So, in April, May, and beyond, the markets were no longer reacting to the idea of a recession. We were already in a recession! Instead, they were reacting to what analysts anticipated would happen in the future: an economic recovery. Specifically, that government stimulus would help, more government stimulus would arrive, and the pandemic would end. Some of those things happened, and some didn’t, but as always, the markets moved ahead of the economy.

All most people saw, though, was a series of unrelentingly negative headlines. That’s why many investors ended up sitting on the sidelines as the markets rebounded. After all, no one buys sunscreen when it’s raining. Sadly, too many investors missed out, just as they often do whenever the news seems bleak. (And of course, the opposite is also true: Too many people rush to invest just because the news is good, even if what they’re buying doesn’t make sense.) The problem was repeated in the fall when too many investors made decisions because of who won the election, or who lost, even as the markets continued to climb.

You can probably guess Lesson #2:

2. The markets and the economy are not the same. That’s one reason we should never make investment decisions based on headlines!

Finally, let’s talk a little bit about the most important thing that happened in 2020. We’re referring, of course, to:

The Coronavirus.

The next few paragraphs are not coming from us, the financial advisor. They’re coming from us, as people.

There’s no getting around it, 2020 was a hard year. Everyone, we think, suffered in some way. Some people suffered because they lost their job, saw their pay reduced, or their hours cut back. Others suffered because they felt isolated, or lonely. And of course, so many people suffered due to the virus itself – either because they caught it, or because someone they loved did.

This pandemic has tried our souls in so many ways. And while we sincerely believe there is a light at the end of the tunnel, this year will come with its own challenges. But there’s a final lesson that
2020 taught us. A lesson that will get us through the months ahead.

3. There is nothing we can’t adapt to. There is nothing we can’t overcome. There is nothing we can’t do.

That’s what 2020 taught us: That we are stronger than we knew. The universe threw a pandemic, a market crash, a recession, and an election at us in 2020, and we got through it. Maybe the year left scars, but it also left us stronger. So whatever 2021 hurls our way, we can take it. Economic uncertainty? Seen it, dealt with it. Market volatility? Been there, done that. We’re not saying it will be easy. But doable? You bet.

As we progress further into the New Year, we hope you will remember these lessons. It may sound corny, but we earnestly hope you keep them in your heart. They will help you weather the trials to come. They will help you work toward your financial goals.

One more thing to remember: Our team will always be there for you. If you have questions, we want to answer them. If you have concerns, we want to address them. If you have dreams, we want to help you achieve them. We look forward to serving you this year, and for many years to come.

Happy New Year! Let’s make it a great one!

Sincerely,

Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

1 “S&P 500 Historical Prices,” The Wall Street Journal,  https://www.wsj.com/market-data/quotes/index/SPX/historical-prices

2 “How the market has performed during past viral outbreaks ,” MarketWatch, https://www.marketwatch.com/story/heres-how-the-stock-market- has-performed-during-past-viral-outbreaks-as-chinas-coronavirus-spreads-2020-01-22

Santa Really Does Exist… December 21, 2020
Downloads: Santa-really-does-exist.pdf

Santa exists.  We can prove it.

We know you probably stopped believing in Santa Claus a long time ago.  So did we.  And not just Santa, but Rudolph, the elves, the workshop, all of it.  We accepted the fact that it was only a story for young children.  In short, we grew up.

But we were wrong.

***

On a winter’s night in 1971, a man named Larry Stewart stopped at a diner in the town of Houston, Mississippi.1  Out of a job and out of money, he hadn’t eaten in almost two days.  But he went into the diner anyway, ordering a meal before pretending to lose his wallet.

The owner of the diner came over and picked up a $20 bill off the floor.  “Son, you must have dropped this,” he said.  Thinking it was a miracle, Stewart took the money, paid his bill, and left.

Only afterwards did he realize the truth: the owner hadn’t picked up the money from the ground. He’d given it directly to Stewart, in a way that wouldn’t embarrass him.  From then on, Stewart vowed he would help others the way the owner had helped him … if only he got the chance.

Nine years later saw Stewart in the town of Independence, Missouri.  Once again out of a job (a company he’d started had recently gone under), he stopped at a drive-in to get some food.  Seeing that one of the carhops was cold, overworked, and probably underpaid, Stewart gave her a $20 bill.  “Keep the change,” he said.

“You’re kidding,” she replied in disbelief.

“No ma’am, Merry Christmas.”

“Sir,” she said, crying, “you have no idea what this means to me.”

But Stewart did.  He remembered his own gift nearly a decade earlier, and his promise.  He could have stopped there, but “paying it forward” felt so good that he kept doing it.  For over twenty years he gave money to the cold, the hungry, and the needy, especially around Christmas time.  While he didn’t have a beard, reindeer, or a sleigh, he would sometimes dress up in red.  In and around Kansas City he made his rounds, giving $20 here, $100 there, even $1,000 if someone really needed it.  Most of the money was given to people he met on the street, or in bus stations,

or at the Laundromat; anyone who looked in need.  Race made no difference, nor age, nor anything else.  For him, charity is for all who are suffering.

Eventually, word got around.  Santa Claus was in Kansas City.  A Secret Santa, but Santa nonetheless.  No one knew who he was, for he never told anyone his name.

After starting another, more successful business, Stewart began helping people in other places.  He went to New York after 9/11.  New Orleans after Katrina.  Washington, Chicago, California.  Remember, Santa can go everywhere.  Maybe he couldn’t travel the world in a single night … but wherever he was, there was always someone who needed him.

In 1999, Stewart tracked down the owner of the diner.  He gave him $10,000.

In 2006, Stewart finally revealed who he was. 2 He passed away a year later, but his legacy continues through the work of other Secret Santas all over the world.3 So that got us thinking: How can we say Santa doesn’t exist?  Why does he only have to be a myth?  Is he not simply someone who gives gifts out of kindness?  Maybe the Santa we believed in as a kid isn’t real, but the truth is much better anyway: there is no one Santa, but a hundred Santas, or a thousand.  The number doesn’t have to end.  Anyone can be Santa.  Every time we help someone in need, we’re Santa.  Every time we make Christmas about giving more than getting, we’re Santa, too.

We think that’s the secret.  Maybe the original Santa, if there ever was one, got old and had to retire.  But his final gift was to ensure that someone, somewhere, would always be there to carry on his name, someone like Larry Stewart.

This Christmas, we hope we can all take a moment to spread joy to someone who really needs it.  Maybe it’s a neighbor, or a co-worker, or just someone we meet on the street.  But whoever it is, remember . . .

Santa exists.  And he could be you.

Sincerely,

Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

P.S.  From all of us here at Hudock Capital Group, Merry Christmas!

1 Nancy Hellmich, “Santa shares his secret,” USA Today, December 21, 2006.  http://usatoday30.usatoday.com/news/nation/2006-12-20-santa-secret_x.htm

2 Associated Press, “Illness unmasks generous ‘Secret Santa.’” MSNBC, November 15, 2006.  http://www.msnbc.msn.com/id/15751409/

3 “Society of Secret Santas,” Secret Santa World, accessed November 28, 2012, http://secretsantaworld.net/

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