Financial Strategies

New year, new possibilities

Column by Patricia Kummer
Posted 1/20/21

A new year is upon us and 2020 is but a bad memory. It is important though, to learn what we can from the events of last year, to better prepare for any opportunities in 2021 and beyond. It is hard …

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Financial Strategies

New year, new possibilities


A new year is upon us and 2020 is but a bad memory. It is important though, to learn what we can from the events of last year, to better prepare for any opportunities in 2021 and beyond.

It is hard to believe that a pandemic that hit the United States early last year will still be with us in full force a year later. This is a good example of what it feels like to plan for the unknown, and why it is so important to do so.

Last year was riddled with many issues: economies shutting down, overrun hospitals, businesses closing, job loss, social unrest and political turmoil, just to name a few. And many of these issues played out in the stock market, causing a significant correction, bear market and unprecedented recovery. These are all virtually impossible to plan for. Therefore, every plan should have flexibility for the unknowns you cannot predict. Even for those who thought they could predict how the market would behave in these situations, many were wrong, and missed out on the strongest recovery in history.¹

Let’s look at the lessons learned here so we can be better stewards of our resources going forward.

• Trying to time the market almost never works. Remember the old adage, it is time in the market, not timing the market that brings the best results. March 2020 was a perfect example. Although we had a significant and quick decline, we had an equally significant and fast recovery.

• Emergency reserves are crucial at all times. The unemployment rate skyrocketed on a moment’s notice. Businesses were closing all year long, and the decline in the services sector was virtually impossible to predict. Having cash emergency reserves for at least six months’ living expenses may have been the difference in keeping your house, car and investments intact.

• Diversification is essential. Most investors wanted more cash and bonds in March but then drastically wished they had more equities the rest of the year. This teaches us that proper diversification, based on your time frame, risk tolerance and income needs, is crucial all year long. When you have the right mix of conservative and growth investments, you can take distributions from the lower-risk assets and let the growth assets compound for longer periods of time, potentially helping offset future inflation.

• Don’t let emotions or politics drive your investment decisions. Many investors and advisors alike thought the stock market would be negative in 2020. This concern started off with impeachment news without much concern (at that time) that we couldn’t avoid the pandemic quickly. Also trying to guess how an election year would affect the stock market can be a hopeless task. Many learned that lesson in 2016 as well.

• Bad times can create opportunity. Warren Buffett put it best when he said, “Be fearful when others are greedy, and greedy when others are fearful.” Don’t underestimate innovation during difficult times.

There are many other reasons to be prepared and prudent, but the main message is to build a flexible financial plan. Start with the basics, such as emergency reserves and proper portfolio design. Don’t get caught up in the hype, which you can now see was not beneficial during 2020.

Start the new year with goals to keep your plan current, review your portfolio, plan for taxes, update your estate plan and prepare for the unexpected. We believe these simple steps can better position you to handle future unknowns.

1. Barron’s — The S&P 500 Is Trading Near an All-Time High. It’s the Fastest Recovery Ever.

Patricia Kummer has been a Certified Financial Planner professional and a fiduciary for over 35 years and is Managing Director for Mariner Wealth Advisors, an SEC Registered Investment Adviser. Please visit for more information or refer to the Investment Adviser Public Disclosure website ( Securities offered through MSEC, LLC, Member FINRA & SIPC, 5700 W. 112th Suite 500, Overland Park, KS 66211.

Patricia Kummer


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