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The Northern Star Newsletter 3/13/20 - Rallies and Retreats


Message from Jon

*This is longer than normal*

Market Update 


These past couple weeks have been anything but pleasant. I just returned from securing a partnership to enhance our skills and abilities to look after and care for our clients and their needs, wants, and wishes. We had 5 different planes to fly what would have been a total of 5 hours round trip. Traffic was noticeably less on the return flights than on the trip down, to be sure.

Let me give a brief explanation of who Tyler is. Tyler Hardt has his CFA designation, an MBA from Wharton and worked for 8 years with Artisan Partners (Funds) before leaving and returning to his roots in Naples to start his own firm and be closer to family. Tyler's experience as an institutional analyst and trader for Artisan gives Summit additional insights into Wall Street. While Tyler still owns his own firm, Pelican Bay Capital, he is partnering with Summit to supplement and enhance our day to day portfolio operations and management. 

On the final trip into Indianapolis from Chicago we experienced an hour of turbulence...and I have to say, my first thoughts were, "Man...this is what the market feels like right now!"

We are seeing extreme swings in the markets daily. The VIX is remaining above 40 and our indicators have weakened significantly but have still, oddly enough, remained positive.1 All last week while I was with Tyler nailing down the logistics of working with one-another, we were both modeling and talking and re-modeling the markets based on daily and sometimes hourly breaking news. Each day we asked ourselves the same set of questions.

  1. What do we know as fact today and has it changed from yesterday?
  2. What do we not know as fact but suspect will happen with a degree of certainty?
  3. What do we have no idea about?

While they are fairly simple in nature, they are very complex in reality when the news feeds and data seem to be changing rapidly by the day and sometimes by the hour. The key here is to remain in the moment and to think logically and place all emotion, suspicions and rumors on the shelf. Our ability to compartmentalize came in very handy this past week, to be sure.

Until Saturday evening, we were prepared to let portfolios ride and stay our course since the Coronavirus is what we considered a Black Swan Event, which is by its nature unknowable and unpredictable and therefore un-plannable. In our opinion, the correct course of action during these events is to remain calm and do nothing. That's right, DO NOTHING! 

The shape of the timeline during black swans is V shaped. There are rapid declines followed by rapid rallies and both are so quick and sharp that trying to exit and reenter only causes more costs, locks in losses, and diminishes your long-term results.

Until Saturday evening, we were prepared to DO NOTHING. However, Sunday morning all our models changed because the answers to Question 1 changed. On Saturday evening, the Russians and Saudis who had been engaged in negotiations over Oil production were in discussion when the Russian delegates became upset and walked out (over what I do not know, since I was not there). As a result, the Saudis decided to disturb the Supply by changing the output rates per day and causing the Oil price to decline to between $30-$40 per barrel per day.6 

Yes...what we knew as fact yesterday has now changed!

Here is what we now know and what with reasonable suspicion we think will happen as a result. Keep in mind here that what we know and what we think will happen is far and away different than what we know and what we know will happen. These are our professional opinions here, so we are playing with probabilities and possibilities while still continuing to ask ourselves daily the questions listed above. 

What we know as fact

  • We know that the Coronavirus is still spreading at about a factor of 10X.2
  • We know that real risks still are with immune suppressed and elderly while all other populations are just going to get the flu on steroids, as it were.3
  • We know that you can be carrying the virus for up to 14 days before showing signs of illness, and by then...well, who knows how many have been infected.4
  • We know that there are now cases showing up beyond Florida, California, and Oregon. Cases in Indiana and other states are now popping up.5
  • We know that the Saudis have increased production in oil and decreased the price to below $40.00 per barrel.6
  • We know that they have no stated timeline to change this strategy.6
  • We know that this approach is designed to encourage Russia to comply in a deal on oil production.7

What we suspect-but do not know as fact...yet

  • We believe that the virus will spread rapidly and gain more fervor and ferocity by the day, producing even more of a panic emotion within communities.
  • We believe that the virus will cause schools, companies, and venues to restrict, alter, or even cancel daily functions and operations and events for a short time that could go longer than expected.8
  • We believe that the virus will impact travel possibly going into the summer.
  • We believe that the virus will impact earnings of companies in the 2nd quarter due to the restrictions of the consumer.
  • We believe that this oil decline will negatively impact oil producers initially and even put some into bankruptcy.
  • We believe that the oil decline could negatively impact the Manufacturing and Industrial Sectors and send them into a mild or soft recession (depending on how long the oil issue lasts).
  • We believe that the oil decline, coupled with the Coronavirus scare, could have a one-two punch that may have a more pronounced impact on the US economy (not saying recession here).
  • We believe that this one-two punch could last longer than 30-60 days but that it will most likely last shorter than 1 year.
  • We believe that in 1 year, we will not be talking about the Coronavirus at all.
  • We believe that in 1 year we may also not be concerned about Oil being at $30-40 per barrel.
  • What we believe is that soon, there will be some exceptional opportunities to invest into the markets that will make returns for the next several years.

What we do not know-and do not have any way of correctly modeling beyond simply guessing!

  • What we do not know is how far down this correction in the stock market will go.
  • What we do not know is how long this stock market correction will last before a rebound.
  • What we do not know is how long Oil will remain artificially low.
  • What we do not know is what impact on the US economy specifically the Oil decline will have.
  • What we do not know is if the one-two punch referred to above will send the entire economy into a recession or only a few isolated sectors.
  • What we do not know is what opportunities specifically will be present and when they will manifest for certain...yet. 

Right now, we are staying in the moment, analyzing all known data and modeling our questions listed above to help determine the proper course of actions for our clients. That is what we do and have done for nearly 20 years. We have partnered with Tyler Hardt and have added and added additional staff and advisor to enhance our services and support we are already providing clients. This will deepen our talent pool, increase our service and response rates, and increase our long-term return potential for clients and prospective clients for the next 20-30 years in our opinion!

Tyler and I are working on a webinar series now that we hope to begin to offer on a quarterly basis and open it up to clients so that we can be even more transparent and accessible than we already are.  When we are ready, we will be sending out notices for dates, times and instructions for attending. 

Until we speak again...stay calm, remember what mom always said, wash your hands. 



  1. https://markets.businessinsider.com/index/vix
  2. https://www.cdc.gov/coronavirus/2019-ncov/about/transmission.html
  3. https://www.cdc.gov/coronavirus/2019-ncov/specific-groups/high-risk-complications.html
  4. https://www.livescience.com/coronavirus-incubation-period-when-symptoms-appear.html
  5. https://www.cdc.gov/coronavirus/2019-ncov/cases-in-us.html
  6. https://www.cnbc.com/2020/03/11/oil-prices-saudi-aramco-moves-to-ramp-up-production-amid-russia-feud.html
  7. https://www.nytimes.com/2020/03/10/world/europe/russia-saudi-oil.html
  8. https://www.purdue.edu/president/messages/campus-community/2020/2003-coronavirus-update-2.php

Rallies and Retreats


The Week on Wall Street

Heightened coronavirus fears, falling yields, and Super Tuesday primary results sent stocks on a rollercoaster ride of sharp price swings, leaving stocks marginally higher for the week. 

The Dow Jones Industrial Average improved 1.79%; the S&P 500, 0.61%; the Nasdaq Composite, 0.10%. Outside the U.S., developed equity markets tracked by the MSCI EAFE Index rose 2.60%.[1][2]

A Swift Fed Decision

Wednesday morning, the Federal Reserve lowered its short-term interest rate by 0.5% to a range of 1.00%-1.25%, making its biggest cut since 2008. Addressing the media, Fed Chairman Jerome Powell said that the move was made to give the economy a "meaningful" lift and "help boost household and business confidence." 

The question is whether reducing borrowing costs can effectively address growing business and consumer anxieties about shopping, traveling, and gathering.[3]


A Push Toward Treasuries

The uncertainty on Wall Street has heightened demand for Treasury bonds. Their yields typically fall as their prices rise, and fall they did last week. The yield on the 10-year Treasury dipped under 0.70% during Friday's market day, an all-time low.[4]


Winter Hiring Surge Continues

The Department of Labor's latest employment report showed companies adding 273,000 net new hires last month. Net monthly payroll growth has averaged 243,000 since December.[5]


What's Ahead

The Fed's 50-basis-points cut in the federal funds rate has now shifted the sights of investors toward the European Central Bank, which is expected to make a policy announcement on March 12. The ECB has less room to maneuver than the Fed, since its key interest rate currently stands at -0.5%. Negative interest rates have done little to lift eurozone economies, which may necessitate more-creative monetary policy accommodation from the ECB's new president, Christine Lagarde.


Traders are also focused on whether the Federal Reserve will make another rate cut on March 18, when its next meeting concludes. The half-point rate cut this past week did little to soothe stock market concerns; opinions vary about what the central bank might choose to do next.[6]



Wednesday: The Census Bureau publishes a new Consumer Price Index, showing monthly and yearly inflation. 

Friday: The University of Michigan presents its initial Consumer Sentiment Index for March, measuring consumer confidence.


Source: MarketWatch, March 6, 2020

The MarketWatch economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.



Monday: Thor Industries (THO)

Tuesday: Dick's Sporting Goods (DKS)

Thursday: Adobe (ADBE), Broadcom (AVGO), Dollar General (DG), Oracle (ORCL), Ulta Beauty (ULTA) 


Source: Zacks, March 6, 2020

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.


Quote Of The Week

Fountain Pen

"You are never too old to set another goal or to dream a new dream."
- C.S. Lewis

Recipe Of The Week

Fork and Knife

Knockout Spicy Chicken Strips

Serves 4-6 Ingredients:
  • 1½ lbs. chicken, cut into small strips
  • Cooking spray
  • 1 cup all-purpose flour
  • 1 Tbsp. salt
  • 3 large eggs, beaten
  • 3 Tbsp. your preferred hot sauce

  • 1 cup cornmeal
  • 2 Tbsp. chili powder
  • 1 tsp. cayenne pepper
  • Extra virgin olive oil
  • Additional salt, to taste
  1. Preheat oven to 425° F, with center rack in place.
  2. Spray baking sheet with cooking spray.
  3. Mix flour with salt in bowl.
  4. Whisk eggs and hot sauce in separate bowl.
  5. Combine cornmeal, chili powder, and cayenne pepper in third bowl.
  6. Take each chicken strip, in turn, and dip into flour and then egg.
  7. Once egg mixture stops dripping, cover each chicken strip through cornmeal mixture.
  8. As you finish breading chicken strips, place them evenly on the baking sheet.

  9. Spray or drizzle lightly with olive oil and season with additional salt, to taste.
  10. Bake until fully cooked, 15 to 17 minutes.


Recipe adapted from FoodNetwork.com[7]


Tax Tips


Tips for Gift Taxes

If you gave someone money or property, you may owe taxes on the gift. Here are some tips to help you determine if your gift is taxable:


Nontaxable Gifts. While the default assumption is that gifts are taxable, the following are nontaxable gifts:

  • Gifts that do not exceed the annual exclusion for the calendar year ($15,000 in 2019)
  • Tuition or medical expenses you paid directly to a medical or educational institution for someone
  • Gifts to your spouse
  • Gifts to a political organization for qualified uses
  • Gifts to qualifying charities

Annual Exclusion. For 2019, the annual exclusion is $15,000. Gifts under that amount are not subject to the gift tax, even if they don't fall into one of the categories above. If you give a gift to someone else, the gift tax usually does not apply until the value of the gift exceeds the annual exclusion for the year.


For more information on gifts and taxes, speak to a qualified tax professional.


* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov[8]

Golf Tip


Simply Visualizing a Successful Putt

How can you step up to a putt of some distance with confidence and without taking so much time that you seem like a snail to your playing partners? Try this simple routine.


Stand a bit back from your ball (not over it), and take two practice strokes that mimic what you want the real stroke to feel like. Address the ball, look down the line of the putt, and visualize the putt going into the hole. Now, take a second look from where your ball lies to the apex of the putt's break and look further down the line of the putt to the hole. Then, hit your putt.

Tip adapted from U.S. Sports Camps[9]

Healthy Lifestyle

Medical Cross

Choose to Make Your Plate "MyPlate"

Ah, the Food Pyramid. It had a lot of flaws. Its major weaknesses were that it generalized recommended servings per day and poorly defined portion sizes. So, in 2008, the U.S. Department of Agriculture implemented a user-friendly redesign: the pyramid was transformed into a plate.

The concept behind the MyPlate design was somehow both revolutionary and seemingly obvious. After all, we eat off a plate, not a pyramid. Portions are easier to visualize and compose the following ratio: half the plate, fruits and vegetables; the other half, grains and protein. A serving of dairy (or non-dairy alternative) on the side. Easy, right?


Take advantage of this method the next time you sit down for a meal and see what adjustments you can make to make your plate even healthier.

Tip adapted from ChooseMyPlate.gov[10]

Green Living


Turn Your Lawn(care) Green

Spring is right around the corner, meaning it's time to think about taking care of your lawn and garden.


This year, consider what you can do to add some healthy and green alternatives to your usual lawn treatments. If you're new to organic law treatments, the first swap you can make is to use organic soil for your flower beds. No matter what type or mixture of soil you have, there's an organic system that will help keep your lawn green all spring long.


Adding some flowers to your yard? Use coconut fiber biodegradable seed starter pots. Peat pots are biodegradable, but have a tendency to mold, killing off the flowers at the roots. The coconut fiber pots can be planted right in the ground and provide nutrients to your growing plants.

Tip adapted from RealSimple[11]

Share the Wealth of Knowledge!


Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!



Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.


Diversification does not guarantee profit nor is it guaranteed to protect assets.


International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.


The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.


The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.


The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia.

The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.


Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.


Past performance does not guarantee future results.


You cannot invest directly in an index.


Consult your financial professional before making any investment decision.


Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.


These are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named representative,

Broker dealer or Investment Advisor and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.


By clicking on these links, you will leave our server, as the links are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.

 [1] www.wsj.com/market-data [2] www.wsj.com/market-data/quotes/index/XX/MSCI%20GLOBAL/990300/historical-prices [3] www.washingtonpost.com/business/2020/03/03/economy-coronavirus-rate-cuts/ [4] www.cnbc.com/2020/03/06/the-plunge-in-bond-yields-is-scary-now-but-could-be-helpful-later.html [5] finance.yahoo.com/news/nonfarm-payrolls-reach-peak-273k-151603832.html [6] www.fxstreet.com/macroeconomics/central-banks/fed [7] www.foodnetwork.com/recipes/giada-de-laurentiis/spicy-chicken-tenders-with-honey-mustard-recipe-1921323 [8] www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes [9] www.ussportscamps.com/tips/golf/4-easy-ways-to-read-greens-and-start-sinking-more-putts [10] www.choosemyplate.gov/eathealthy/WhatIsMyPlate [11] www.realsimple.com/home-organizing/gardening/outdoor/lawn-care-products-eco-friendly

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Summit Financial Group of Indiana
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Securities offered through Regulus Advisors, LLC. Member FINRA/SIPC. Investment advisory services offered through Regal Investment Advisors, LLC, an SEC Registered Investment Advisor. Registration with the SEC does not imply any level of skill or training. Regulus Advisors and Regal Investment Advisors are affiliated entities. Summit Retirement Advisors, LLC and Summit Financial Group of Indiana are affiliated entities. Summit Retirement Advisors, LLC and Summit Financial Group of Indiana are independent of Regulus Advisors and Regal Investment Advisors.

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