Beware Of This COVID-19 Scam

Contributed by: Nick Defenthaler, CFP®, RICP®

During times of uncertainty, it is common for adversaries to take advantage of global headlines in an attempt to get people to click malicious links, enter credentials on fraudulent websites, volunteer their personal information, download malicious software or fall for common interpersonal scams.  

Emerging Trend: Economic Impact Payment Scams

Congress recently passed a COVID-19 relief and stimulus package (click here to learn more about the “CARES Act”). As with other aspects of the COVID-19 pandemic, fraudsters are exploiting the relief and stimulus efforts to victimize the public. The latest scams optimize on these stimulus relief initiatives like Economic Impact Payments to trick individuals into providing financial and other personal information.

If you receive calls, emails, or other communications claiming to be from the Treasury Department, the IRS or other government agency offering COVID-19 related grants or stimulus payments in exchange for personal financial information, an advance fee, or charge of any kind, including the purchase of gift cards; do not give out your personal information.

Economic Impact Payment Scam Red Flags

• The use of words like "Stimulus Check" or "Stimulus Payment." The official term is Economic Impact Payment.

• The caller or sender asking you to sign over your Economic Impact Payment check to them.

• Asking by phone, email, text or social media for verification of personal and/or banking information, insisting that the information is needed to receive or speed up your Economic Impact Payment.

• An offer to expedite a tax refund or Economic Impact Payment faster by working on the taxpayer's behalf. This scam could be conducted by social media or even in person.

• Receiving a 'stimulus check' for an odd amount (especially one with cents), or a check that requires that you verify the check online or by calling a number.

Pandemic-Related Phishing Attempts

COVID-19-related email scams have become the largest collection of attacks united by a single theme. Adversaries continue to pose as the World Health Organization (WHO), the Centers for Disease Control and Prevention (CDC), and now government agencies like the IRS to obtain information. General COVID-19 red flags include:

• Urging people to click on links regarding “safety tips” to prevent sickness and to “view new cases around your city.”

• Posing as the CDC, WHO or other well-known health organizations.

• Posing as a medical professionals requesting personal information.

Protecting Senior Citizens

• ·Under normal circumstances, seniors are more likely to fall victim to scams. Preying on fear and isolation, fraudsters have no reservations about trying to take advantage of this section of the population even in the most desperate times.

• Additionally, as social distancing continues to be necessary, experts worry that social isolation will lead to depression, anxiety and ailing health for some seniors. These could lead to both cognitive decline and the desire to find social interaction online—easily leading senior and at-risk clients to fall victim to both COVID-19 scams and other common online, interpersonal or romance scams.

Security Recommendations

We recommend that you take the following actions if you receive a suspicious email or phone call:

• If you believe an email could be suspicious, do not click any links, reply or provide any information.

• Always confirm who you are receiving emails from. Thoroughly check the email sender and domain names to be sure that they are accurate before giving out any personal details or performing any requests.

• Be aware of common red flags such as a sense of urgency, posing as a person of authority, or even uncommon language coming from a person you speak to every day.

Nick Defenthaler, CFP®, RICP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® Nick specializes in tax-efficient retirement income and distribution planning for clients and serves as a trusted source for local and national media publications, including WXYZ, PBS, CNBC, MSN Money, Financial Planning Magazine and OnWallStreet.com.

Market Performance and Viral Outbreaks

Contributed by: Angela Palacios, CFP®, AIF®

Recent market volatility caused by the spread of the coronavirus and a fear of a global economic slowdown has left many wondering if this has happened before and if so, is it different this time?  There have been numerous outbreaks in recent history that we can look at.  Below is a list of different outbreaks (many of which were far deadlier than the coronavirus) that occurred. Check out the return of the S&P 500 6 and 12 months after the epidemic.

But how about a short term global impact?  The chart below shows 1 month, 3 month, and 6 month returns of the MSCI World index.  Again, not the extreme reaction that we are feeling right now in markets. 

While there may have been short term volatility, in most cases it was short lived.

But you may still be thinking that it is different this time.   The world is far more dependent on global trade than it was during SARS in 2003 for example.  There will be some supply chain disruptions and we may not be able to source these goods from other locations quickly enough.  For example, Coca-Cola recently announced that there may be some supply disruptions in the artificial sweetener used in Diet Coke and Zero Sugar Coke…this could be devastating!  I may have to switch to drinking regular coke! Actually, I don’t drink very much pop but now that I know there could be a shortage I’m craving it!  Jokes aside, many industries may face this challenge until China is back up and running around the globe.  The trade war has actually done more to prepare us for this situation than, I think, anything could have.  Companies were already searching for supply sources outside of China or bringing production back into the U.S. after the implementation of tariffs last year.

The severity of the virus will dictate the eventual outcome. Right now investors are taking a “sell first and ask questions later” mentality. We have a lot to learn from the individuals in the U.S. under care of physicians here in the U.S. as to exactly how deadly this flu is under our system of healthcare which is one of the best in the world. Markets are selling off on a guess, right now, of where this could head. If history is any indicator, by this time next year, this should be a distant memory.

Angela Palacios, CFP®, AIF®, is a partner and Director of Investments at Center for Financial Planning, Inc.® She chairs The Center Investment Committee and pens a quarterly Investment Commentary.

---

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Past Performance does not guarantee future results. One cannot invest directly in an index. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The MSCI World is a free float-adjusted market capitalization index that is designed to measure large and mid cap performance across 23 developed markets countries. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

Markets Flash Fear as COVID-19 Approaches Pandemic Status

Contributed by: Raymond James

U.S. equity indices fell over 3% on continued news of the coronavirus’ spread.

As coronavirus cases continue to escalate in several new regions, like South Korea, Italy, Japan, Iran, Singapore and the United States, Raymond James Healthcare Policy Analyst Chris Meekins believes we are now in the midst of a COVID-19 pandemic. The word itself isn’t intended to cause panic, but rather to prompt increased awareness of the potential economic and health effects of this rapidly spreading virus. Meekins believes the United States now faces a 1 in 3 chance of a widespread outbreak given recent events.

Unfortunately, the illness – thought to have originated in Wuhan, an important Chinese manufacturing hub – has taken its toll on equity markets, causing disruption in several industries, including travel and energy, as well as major supply chains in India and China. Amid the trade war, supply chains generally migrated away from China to places like Vietnam, Thailand and Mexico; however, global supply chains are deep and complex, and disruptions have already led to halts in motor vehicle production in Japan and South Korea, explains Chief Economist Scott Brown. U.S. firms also face a loss of sales to the Chinese market, he notes.

In addition, oil fell on concerns over weakened Chinese demand and the risk of further demand impact outside the Asia-Pacific region. However, Raymond James energy equity research analyst Pavel Molchanov believes oil prices should recover by year’s end, overcoming the virus-related demand headwinds. The current production outage in Libya is also helping to “cancel out” some of the demand headwinds.

While volatility is likely to continue to weigh on certain sectors until the virus is contained, any pullback could be viewed as a potential buying opportunity within favored sectors as the overall fundamental backdrop remains supportive of equities, according to Chief Investment Officer Larry Adam. Opportunities to add fundamentally sound positions to your portfolio may present themselves over the near term. Your advisor will continue to monitor the news for indications of broader impacts and share any developments with you.

It’s hoped that the global response to contain the deadly respiratory disease proves effective soon and that increased public awareness will deter the spread of the virus. To learn more about how to protect yourself and your family, please visit cdc.gov for updates.

Investing involves risk, and investors may incur a profit or a loss. Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation, and may not be suitable for all investors. All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc., and are subject to change. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. This material is being provided for information purposes only. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.