Ric Edelman, founder of the nation’s largest independent financial planning and investment advisory firm, today released a 64-page report that warns of dire financial outcomes for millions of Americans.
Edelman’s report, The Long-Term Financial Impact of Covid-19 and What it Means for You, asserts that the pandemic is leading people to bad investment strategies, poor career choices and the wrong financial decisions – all of which are avoidable.
The report was written for the firm’s retail clients and is now available to the public. In it, Edelman explains the firm’s long-standing, four-pillared investment philosophy – based on diversification, a long-term view, strategic rebalancing, and the use of low-cost, tax-efficient investments – and why a disciplined investment approach is more important than ever.
“Americans without a sound investment strategy often fall victim to behavioral finance biases that cause them to make bad decisions,” said Edelman, who is considered one of the most influential thought leaders in the financial planning and investment management profession. He is in the Barron’s Financial Advisor Hall of Fame, hosts a popular radio show that airs on more than 100 stations across the country, and is a #1 bestselling author of 10 books on personal finance.
The report offers a 10-question Investment Readiness Quiz that can help investors determine if they’re in danger of panicking the next time stocks prices fall. “Millions of investors sold at the bottom of the 2007-2009 Credit Crisis,” Edelman said, “leading to massive losses from which many never recovered.”
The report delves into the virus’s impact on the economy, employment, real estate, agribusiness, state and local government budgets, philanthropy, higher education, pensions/annuities/Social Security/life insurance, retirement, and of course, the stock market. For example:
- The Economy and Employment: The Covid-19 pandemic has created one of the worst financial crises in the last 100 years, with unemployment levels not seen since the Great Depression. Edelman argues that the economy is unlikely to fully recover until a vaccine is widely distributed.
- Real Estate and Housing: The paper shows that Americans’ struggles to pay their rent and mortgages, along with the shift to remote work, will adversely impact commercial real estate for years, with negative implications for urban markets.
- Retirement Planning: The Covid-19 pandemic has exacerbated the already serious retirement savings gap. With so many families entering retirement with little money saved, reliance on Social Security is at an all-time high – just as the Social Security Trust Fund is being depleted.
- Investing and the Stock Market: The S&P 500 is trading at 22x projected earnings, suggesting that investors are behaving euphorically, in contrast with current economic conditions. In the report, Edelman explains why investors should dampen their enthusiasm.
“Covid-19’s impact on the economy has been and will continue to be unprecedented. It is therefore essential that you consider the many ways it may alter your life and be willing to adjust your investment and personal finance strategies accordingly,” said Mr. Edelman. “Americans are an optimistic bunch, but optimism is no substitute for honest evaluation, and hope is not a financial plan.”
For more information, visit www.edelmanfinancialengines.com/ric-edelman-radio.
About Ric Edelman
Ric is a financial advisor and has been recognized as one of the most influential people in the financial planning and investment management profession by three leading trade publications: Investment Advisor, RIABiz and InvestmentNews. Three times he has been ranked as the nation’s #1 Independent Financial Advisor by Barron’s In 2004, he was inducted into Research magazine’s Financial Advisor Hall of Fame and in 2019, the Barron’s Hall of Fame. In 2017, he received the IARFC’s Lifetime Achievement Award. Ric is also a Distinguished Lecturer at Rowan University, an award-winning host of one of the longest-running radio shows on personal finance in the country, a producer of award-winning specials for Public Television, and a #1 New York Times bestselling author who has written 10 books on personal finance.
About Edelman Financial Engines
Since 1986, Edelman Financial Engines has been committed to always acting in the best interest of our clients. We were founded on the belief that all American investors – not just the wealthy – deserve access to personalized, comprehensive financial planning and investment advice. Today, we are America’s top independent financial planning and investment advisor, recognized by both InvestmentNews and Barron’s with 168 planner offices across the country and entrusted by more than 1.2 million clients to manage more than $192 billion in assets. Our unique approach to serving clients combines our advanced methodology and proprietary technology with the attention of a dedicated personal financial planner. Every client’s situation and goals are unique, and the powerful fusion of high-tech and high-touch allows Edelman Financial Engines to deliver the personal plan and financial confidence that everyone deserves.
 The Investment Advisor magazine listing of the Investment Advisor 25 is based on readers’ opinions and highlights those who are ahead of the pack with their insights, innovation and disruption. Advisors and other industry participants cast about 12,000 total votes for leaders in the following six categories: RIA/Advisory; Independent Broker-Dealers; Custody & Clearing; Portfolio, Investing & the Markets; Politics/Regulation/Compliance; and Fintech/IA/AI. Investor experience/returns were not considered as part of this ranking.
 The RIABiz listing of the 10 most influential figures in the Registered Investment Advisor industry is in recognition of notable, driven and influential executives who are advancing their firms and are considered influential in the RIA business. Investor experience/returns were not considered as part of this ranking.
 Based on the opinions of the editors of InvestmentNews using the following definition as a guidepost: Those who have conceived new ideas and tools that have propelled the industry forward. Investor experience/returns were not considered.
 According to Barron’s, “The formula [used] to rank advisors has three major components: assets managed, revenue produced and quality of the advisor’s practice. Investment returns are not a component of the rankings because an advisor’s returns are dictated largely by each client’s risk tolerance. The quality-of-practice component includes an evaluation of each advisor’s regulatory record.” The rankings are based on the universe of applications submitted to Barron’s. The selection process begins with a nomination and application provided to Barron’s. Principals of Edelman Financial Services, LLC self-nominated the firm and submitted quantitative and qualitative information to Barron’s as requested. Barron’s reviewed and considered this information, which resulted in the rankings on Aug. 27, 2012/Aug. 28, 2010/Aug. 31, 2009.
 Research magazine cover story “Advisor Hall of Fame,” December 2004 (based on serving a minimum of 15 years in the industry, having acquired substantial assets under management, demonstrating superior client service and having earned recognition from peers and the broader community for how they reflect on their profession). Investor experience/returns were not considered as part of this ranking.
 Barron’s Hall of Fame advisers have been ranked for 10 or more years on the Barron’s Top 100 Financial Advisors list. Barron’s listings are based on data compiled by many of the nation’s most productive advisers, which has been submitted to and judged by Barron‘s. Key factors and criteria for each award include assets under management, revenue produce for the firm, regulatory and compliance record, and years of professional experience. This award is not indicative of this advisor‘s future performance.
 Presented by the International Association of Registered Financial Consultants (IARFC). Candidates must hold a professional designation and must have disseminated their comments on financial topics by having them widely published in articles, journals, books, etc. They must have provided outstanding personal service or leadership in the financial services industry. Nominees must have participated in some aspect of financial education to the public or to other members of the profession. Investor experience/returns were not considered.
 Ranking and status for 2019. For independence methodology and ranking, see InvestmentNews Center (http://data.investmentnews.com/ria/).
 The 2019 Top 50 Independent Advisory Firm Ranking issued by Barron’s is qualitative and quantitative, including assets managed, the size and experience of teams, and the regulatory records of the advisers and firms. Firms elect to participate, but do not pay to be included in the ranking. Investor returns/experience are not considered.
 As of March 31, 2020.