Adversity and Opportunity

Well, another milestone for Cutter Financial this week.  Maeve, our oldest daughter, who was officially our “Chief” landscaper since she was 13 has now been promoted to “Summer” intern while on break from nursing school at Quinnipiac.  Her sisters have some tough-shoes to fill as Maeve pivots from her landscaping duties to a more professional environment.  

Maeve asked me what her official title is; I said Gopher.  With a confused look on her face I followed up with, “Maeve, you are our official gopher . . . go-for this and go-for that.”  With her notorious eye roll she said, “Funny Dad.” 

But with all this craziness going on, Maeve and I had some downtime this week in the office.  This led us to the discussion of what her world was going to look like over the course of the next academic year. We, as a family, are in the blessed position that we haven’t been directly impacted by someone close losing their life or facing economic ruin. While it might not be of much comfort to those who have experienced tragedy close to home, I remind my girls that life continues to go on, and the severity of the crisis will ease at some point. Like all of us, they feel sadness about the circumstances they see others experiencing, but they also have their own personal fears about the future.  What will school look like in the future? How will this affect how they interact with their friends, their community, and world around them? There will be a return to “normal”, but more than likely it won’t look and feel the same as it did at the start of 2020.

Those of us that have been lucky enough to escape some of the more difficult outcomes of the pandemic are already thinking about the new normal.  We, my daughters included, are all getting a lesson in crisis management. It reminds me that adversity can be our greatest teacher and I am trying to instill that in my girls right now. Nobody likes to suffer, but some of our biggest leaps forward come from how we respond to troubling times. I received great lessons in perseverance from my own mother and know that it’s one of the most important family “assets” I can pass down to my kids. The pandemic is also a reminder that we are not in control of so many things, so we need to focus on those things we can control.  

In my own private practice as a financial professional, in order to meet the needs of my clients, it’s been a process of affirmation of the things that were done right, but also an opportunity to find other solutions for my clients.  Part of my practice has always been to incorporate downside risk management into financial systems, particularly when looking at the long-term nature of planning.  Despite the drawdown in the market during the first quarter of the year, there still may be opportunities to incorporate downside risk management depending on the individual and their current financial system. 

You see, we always talk about the inability to accurately predict the near-term markets. Even now, there is an alphabet soup of predictions about how the markets will behave going forward. We are being told it could be V-shaped, U-shaped, or even a double dip W-shaped market. Some people may have opportunities to move “unfix-able” assets. Normally, we try to put our long-term assets such as capital appreciating stocks and funds in tax-deferred accounts. However, in some cases those assets have been kept in taxable brokerage accounts.  Sometimes the tax implications of moving long held appreciated assets from a non-tax qualified account make such a move cost prohibitive. But it might be time to look at some of those assets during a market drawdown and see if they can be reallocated to a tax-deferred account or some other downside risk management vehicle.

Another potential opportunity for you is to review how you’re prepared for emergencies, specifically those that hamper cash flow. We spend a good deal of time planning for college educations and retirements, but times like this are a reminder that everyone needs to have some sort of plan for financial emergencies. This can be particularly true for small business owners. The pandemic is highly unusual in how broadly it is affecting society, but we may all face crisis on an individual level. Having an emergency cash flow plan should be a part of any financial plan.

Other potential mechanisms to look at include the one-time transfer from an IRA to a Qualified Health Savings Plan. This allows for a one-time emergency tax-free transfer of $3450 for single individuals or $6900 for families from and IRA to a qualified health savings plan. In addition, many colleges and universities are accepting monies that have been paid out from 529s. Those can be returned to the existing 529s as basis under the PATH Act of 2015. Lastly, times like these can be a reminder for folks to make sure their health care directives, wills, and estate planning issues are up to date.

You know folks, while we can’t control the crisis or the markets, we can control how we respond to it. Let’s use this opportunity to be thankful for all that we have – and to prepare for the “new normal” quickly coming our way.

So as always – be vigilant and stay alert, because you deserve more!

Have a great week.

Jeff Cutter, CPA/PFS is President of Cutter Financial Group, LLC, an SEC Registered Investment Advisor with offices in Falmouth, Duxbury, Mansfield & Southlake, TX. Jeff can be reached at

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