Broker Check

2020 Q3 Letter to Clients

October 13, 2020

Dear Clients,

In our more than 30 years in financial services, nothing has come close to the impact of the COVID-19 pandemic that is being experienced in America and worldwide. Pile on hurricanes in the east, fires in the west, as well as social unrest, and you have challenges rarely faced by humanity all at one time. When it is over history will speak of many aspects of these events by sharing stories of going above and beyond the call of duty, and descriptions of humankind at its best in times of crisis. There will also be unavoidable stories that will pour out about what went wrong, and what should have been done. Communities across the globe adapted in unique ways to the pandemic. Some of these actions will produce real change, while others will be placed back in the file for potential future reference. The view looking back 20 years from now will be fascinating.

Market Commentary

The stock market has had an impressive rebound from the March 23 lows and is now positive for the year. The S&P 500 index gained 8.9% for the quarter and is up +5.5% for the year. Foreign stocks were up +6.4% in Q3, but that left them still down -5.0% for the year. The Barclays Bond Index was up +0.5% for the quarter and +6.5% for the year.

Globally, $20 trillion in stimulus from governments and central banks pulled the world's economies most of the way back to pre-pandemic levels, but the last stretch will be the hardest. Containing the virus remains a critical source of uncertainty. The world will need to spend even more to keep economies going until a vaccine is widely distributed. The U.S. won the "prize" for spending the most on stimulus and relief programs. The Federal Reserve's renewed pledge to keep the monetary spigots open, and to keep interest rates near zero for years to come, has increased investor enthusiasm and speculation.

The stimulus has had the desired effect of lifting the stock and bond markets and supporting businesses and the unemployed. The stock market ran up to new highs on recovery hopes, and the growing profits of large technology companies whose services help employees work from home.

It seems policymakers in Washington have less desire to vote for additional financial stimulus right before the election. The relief package that is currently being debated is less than half of the initial $5 trillion in support. If there is no deal on more economic stimulus until after the election, the fourth quarter could be a rocky one for markets. At the moment the markets care more about the additional stimulus than the election. 

The economy has rebounded, but that is not the same as recovered. We still have a long way to go on the job front. There are still over 25.5 million people on continuing claims in both the state and Federal unemployment programs. This is down from 30 million in March, but still very high. Eight months after the pandemic started in the U.S., we see the second wave of layoffs beginning as companies must downsize to survive now. The longer this goes on, the more difficult it will become for many. The jobs lost permanently now stand at 3.5 million. No matter who wins the election, we expect a substantial fiscal spending program from Washington next year to stimulate the economy and put some people back to work. Remember, the markets have performed well under both parties, and are more dependent on the economy and corporate profits than on which party wins the election. 

One of the few upsides of the pandemic is the kick-start to innovation across the health care spectrum, from biotechnology and drug development, to diagnostics and patient care. Recent advances in technology, powered by computational biology and artificial intelligence, are driving the creation of new healthcare companies and reshaping industry leaders. We are optimistic about the revolution at hand and see it as a long-term investment theme.

There were some positives this quarter. Consumer confidence posted its biggest gain in 17 years and is emerging sooner and more robustly than past recessions. Housing is doing great due to ultra-low interest rates on mortgages. The low rates also make it an excellent time to refinance your mortgage.


We are cautiously optimistic and expect the positive trend in stocks to re-emerge once the government decides on the next round of stimulus. Policy support will be a critical factor in the bridge to full recovery for both corporations and consumers for some time to come. Technology and growth stocks have gained the most this year and could continue that path as innovation continues.

As all major economies continue fiscal stimulus programs into next year, we expect global interest rates to converge over time. That implies that U.S. rates still have room to go lower from here, which would be a positive for bond prices. 

We will continue to monitor the global economy and adjust your portfolio according to your plan. If you have any questions, we would be happy to share our thoughts and discuss them with you. 

Gratefully yours,

The Silicon Valley Wealth Advisors Team

Tracy Lasecke, CFP®                        Chris Duke, CFP®                             Scott Ponder CFP®

Scott Yang, CPA, CFP®                      Lisa Ozaki                                           Monique Ruiz

Kelsey Bass                               

Happenings @SVWA

We have been looking to expand our footprint in the San Jose office to accommodate growth. While not ideal, we were able to add office space on the first floor in the same building in San Jose. We built out the space with two nice offices and a client center. The client center has a living room, dining room, conference area, as well as a kitchen.

Good Lord willing and COVID-19 dies, we will be enjoying meetings with clients and team members in Suite 150 very soon.

Personal Notes @ SVWA:

Tracy and Roberta have been busy caring for clients, parents, and getting in as much charity works as time and physical distancing would allow.

Chris – In August I lost my sister, suddenly and unexpectedly, after a routine medical procedure. Her estate plan was out of date and incomplete (despite my asking her about it several times over the years). I am sad for the loss of my sister, but I am heartbroken for her three children ages 17, 19, and 21. What I realize now, having lived through it up close and personally, is just how much fear and uncertainty there is for the survivors in the absence of an up to date estate plan. I implore all of our clients, please make sure your estate plan is up to date!!!

Scott and Erin have continued working in the garden and doing improvements around the house with their extra time at home. Cooking has been fun, trying some new recipes and using the fresh produce from the garden.

Scott Yang spent quality time with family, making many dinners at home and using the BBQ outside. Played card games including Monopoly, and Hearts. He also took some bike rides on the Los Gatos trail.

Monique and Family are doing well overall. My preschooler was fortunate enough to get a spot among a few to start school in person. Virtual class for High School and College are going naturally as we have adapted. All of which have aided me in a smooth recovery from my trimalleolar fracture. I cannot wait to get up and walking.

Kelsey has been staying safe inside due to Covid and, more recently, the low air quality due to California fire season. During her time at home she has spent more time experimenting with cooking and banking as well as looking into becoming a part time plant mom.

Hi Everyone, my name is Lisa Ozaki and I’m the new Financial Planning Associate. I recently graduated from San Diego State University with a B.S. in Financial Planning and moved back to the Bay area. I’m excited to grow at SVWA and learn from this great team!

Danielle spent most of Q3 preparing for the CFP exam, which she passed on Sept 25th. Sadly, she will not get to celebrate with her colleagues for long, as she and her family are moving back to the East Coast where they are originally from. Her last day was Oct. 9th, and she wishes the team at SVWA all the best.

Jared was a summer intern who turned into a long-time employee. Nearing graduation, he took another internship in a completely different industry as he tried to hone in on his career choice.