On Wednesday, April 15, 2020 80 million Americans received their Stimulus funds via direct deposit. As the COVID-19 Relief funds are arriving in the hands of Americans that need it most, scammers are working hard to make attempts to get their hands on this money.  As the IRS Commissioner Chuck Rettig said, people need to take extra care during this period. Scammers are opportunists that historically take advantage of people when they are most vulnerable or in a state of need. The 2 trillion-dollar relief fund is a great place for them to go. The folks that are receiving relief from the Covid-19 Stimulus Package are generally more vulnerable than the average tax payer as it applies to individuals that make less than $75,000 year, a majority of whom are senior citizens and represent one of the most vulnerable groups in terms of fraud. It is important to become educated and to educate those around you about the scams that are out there to be able to avoid them properly. Below are examples of some of the most common signs of a scam and how to protect yourself against them.

• A call from the “IRS” asking for a “small payment to ensure they have the right account information” or someone asking for your account information outright. Do not give it to them. The information for the direct depositing of your payment is based off of the information you provided on your tax return. The IRS would not call you for this information. There is also no check to make sure they have the right account information by taking a small amount first.
• A fake check comes to you via mail. Then a sender calls you to verify your account information to “deposit it”. As mentioned already, the IRS would not do this.
• You’re asked by the scammer to sign over the funds to the caller and they will get the funds to you via a cashier’s check, deposit, etc. This seems obvious, but scammers can be very convincing about this being the only way for you to receive the funds.
• You receive an email or text about verifying account information. Once again, the IRS would not do this. Ignore them and report them if possible.
• Scammers contacting you to help you receive your payment faster. This is most pertinent to those that did not have a direct deposit on file and are expecting a check in the mail. As mentioned above, the IRS would not contact you for this reason. Ignore and report of possible.

Other helpful tips:

• The scammer uses the words “stimulus check” or “stimulus payment.” The term that government officials are using is “economic-impact payment.”
• Unsure if it is a real IRS Agent that called you? Ask for their Agent #, and say you will call back the IRS number and ask for them. 1-800-829-1040 is the toll-free number.
• To report scams, as mentioned above, you can forward an email you believe is fraudulent to phishing@irs.gov. More information on reporting is available here: https://www.irs.gov/privacy-disclosure/report-phishing
• Unsure of where your payment is? Check here: https://www.irs.gov/coronavirus/get-my-payment
• Don’t have to file a Tax Return but believe you are eligible? Go here to get your payment: https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

Sources:

https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know

https://www.advisorperspectives.com/articles/2020/04/15/irs-braces-for-scammer-onslaught-accompanying-stimulus-payments?bt_ee=gZBK8I0v96uW0WjEpkgvskYy8VO6i66i8xy9oRvRV%2FJLC87DNzh9GYFeloqe0IhF&bt_ts=1587124155277

https://www.irs.gov/newsroom/irs-issues-warning-about-coronavirus-related-scams-watch-out-for-schemes-tied-to-economic-impact-payments

https://fortune.com/2020/04/16/coronavirus-scams-stimulus-checks-secret-service-covid-19/

https://www.aarp.org/money/scams-fraud/info-2020/stimulus-checks-scams.html

https://www.irs.gov/privacy-disclosure/report-phishing

https://www.bloomberg.com/news/articles/2020-04-15/recipients-of-virus-payments-include-the-recently-deceased

https://www.irs.gov/coronavirus/get-my-payment

https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

https://www.irs.gov/tax-professionals/verify-the-status-of-an-enrolled-agent

https://www.irs.gov/pub/irs-news/at-01-39.pdf

We are living through an unprecedented event. Schools, businesses, and parks are closed. People are stuck in their homes and are unable to visit friends and family. Children are being taught in virtual classrooms. Life itself and every aspect of life is challenged. This situation, just like the Covid-19 virus, is unique…however we can look to the past for perspective.

Oil & Gold – In the early 1970s people believed the dollar was backed by gold. In 1973 the system collapsed and people had to make a mental shift that money holds value because we all agree it does. Our economy was dependent on foreign fuel when OPEC stopped shipping oil to US in 1973. This caused inflation and forced people to wait for hours in line just to get gas. Then the world changed, congress passed fuel efficiency rules and we, as a country, came to the realization that we needed more energy independence. These life lessons have forced us to be better prepared and rethink our systems going forward.

WWII – During WWII, it is not that people didn’t have money to spend, but rather that they had nothing to spend it on. Back then, people were pulled from the economy to go to or contribute to the war. In 1937 the market dropped 35%, then went up, then back down for many years. Cities were being destroyed, 70-85 million lives were lost, yet from 1942-1945, the market returned 20% per year during the darkest days of a generation. The dollar doubled from the beginning to the end of the war. Companies will find a way to be profitable. An extreme example, if they cannot make cars, then they will make tanks. Markets are resilient, because companies are resilient, because we are resilient.

Home – Another way to think of the stock market is like your house.  The daily price movements are not meant to be watched every day. It doesn’t matter what those daily price movements are, what matters is the long-term outcome. We are all bombarded by market news, notifications we didn’t ask for, and relentless media noise. When emotions are high it is easy to let them cloud your judgment. It is okay to feel the way you do, but be sure to disentangle your emotions from your investment decisions. We as your financial advisor and friend are here to help you along the way.

Global Diversification Matters – Last decade the US market did better, the previous decade the International market did better. So far in 2020 the US is not in the top 10. China had the best 1st quarter in 2020. As of now, Denmark is #1, followed by China.

Stock Market Big Picture – For every seller, there is still a buyer. For every pessimist, there is an optimist. There is no universal agreement on where the market is going. Continuous adjustments are made based on new data.

Bear markets last longer than bull markets, but many bull markets experience a 20% decline every 8-11 years. This is to be expected, it is the price of admission.

When the now overwhelms you, look to the future. The market is likely to recover before the “smoke clears”. 2009 was the worst year of the recession, but then the market went up over 25% before the recession was over.

Markets are choppy and have a huge range of volatility within a year, with a historical average of a 9-10% return, but these actual returns rarely occur. Historically after a 20% decline, the 1 year average return is 14.21%, 3 year return 11.58%, and 5 year return of 11.76%.

There can be a strong appeal to market timing but it is a fallacy, as one needs to make two right decisions….and just when the stress of being in the market is too much, remember being out of the market can be just as painful!

All we can do is take care of ourselves and those around us…so we go back to the process, rebalance your portfolio when necessary, harvest losses, and make sure short- term cash flow is met.  We are all here for you, please continue to reach out and we’ll get through this together.