Monday, July 27, 2020

Rollins Financial, Inc. Named to the 2020 Top Firms in Georgia List

During the last several months, many Americans have faced financial uncertainty. However, for those looking for financial guidance, how do they know who they can trust with their hard-earned money?

That’s where comes in.

A consumer advocacy project with the mission of serving Americans as a trusted resource for researching and comparing financial advisors, analyzes 28 million data points from 690,000 financial professionals and 16,000 firms across the country on a monthly basis to determine which firms can be trusted and which ones have red flags consumers should know about.

“Our goal at is to make it easy for Americans to find a firm and advisor they can trust,” said Blain Reinkensmeyer,’s co-founder. “My grandparents spent over $100,000 on excessive fees alone, working with a financial advisor they thought they could trust, and I don’t want to see that happen to anyone else. In fact, Americans lose billions of dollars to excessive fees and overly expensive financial products each year, so we truly want to highlight fiduciaries—those who have a legal obligation to be unbiased and to put the interests of their clients first.”

Today, is making it easier for residents to find an advisor they can trust, with the release of its 2020 Top Firms in Georgia list, which includes Rollins Financial, Inc., a Registered Investment Advisor (RIA) headquartered in Atlanta.

Joe Rollins, the firm’s founder said, “Deciding whom to entrust with your finances can be a daunting task. The last thing you want from your financial advisor is investment advice driven by paid sales commissions. Fee-only advisors act according to the fiduciary standard, a responsibility to act in their clients’ best interests. Therefore, fee-only advisors have fewer inherent conflicts of interest, and can provide more comprehensive, unbiased advice. I founded the firm 30 years ago on this premise and we continue to work diligently to deliver comprehensive, unbiased advice to each client.”’s Trust Algorithm combines both publicly accessible data from the Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) as well as proprietary information such as the security of a firm’s website.

Joe Rollins has said, “When I started Rollins Financial in 1990, my goal was to serve the investment needs of the clients of my CPA firm. We continue to serve many of those clients, as well as many who come to us seeking only investment services. We are honored to be included in the 2020 Top Firms in Georgia list.”

Best Regards,
Rollins Financial, Inc.

Tuesday, July 14, 2020

Worst Stock Market / Best Stock Market In The Last Two Decades, All In The First Six Months of 2020 - Bye Bye Recession

From the Desk of Joe Rollins

I would be lying to you if I did not emphasize how difficult the first six months were on the Stock Market. We have been overwhelmed with bad information and exclamations of concern regarding the pandemic and there seems to be a real shortage of people who look at the real numbers. In the midst of March, many were forecasting, not recession in the United States, but downright depression. Looking back over my notes it is hard to fathom that so many people have been so wrong about this economy.

As we sit here today, it is fairly clear to see the U.S. is not going to shut down again and almost all of the developed countries in the world have passed through the pandemic and are now gearing their economies back up. There is so much I need to discuss with you and go over in this posting. It is fortunate that my prediction regarding the economy was correct and that those that sold out in March were clearly incorrect. It never pays to go against the Federal Reserve and their enormous printing presses that can make money out of thin air. So many investors forgot that most important axiom in investing and sold out in March, leaving them uninvested in one of the best quarters for Stock Market investing in the last two decades.

 Dakota, Carter, Josh, Ava and Joe at Josh and Carter’s wedding

Before I launch into all that very interesting information, I must report on the month of June which was actually a very good month for investing. During the month of June, the Standard & Poor’s Index of 500 Stocks was up 2% yet remains down 3.1% for the year 2020. The other important consideration is for the three months ending June 30th, that index was up 20.5% and for the one-year period it is up 7.5%. Once again to emphasize, if you had stayed invested in this index during the last one-year period, you still would have had a return greater than three times the rate of inflation in the U.S. today.

What was interesting about this first six months is that the major market indexes, for the most part, well underperformed the actively traded mutual funds. While the NASDAQ Composite was up the most, the other indexes were either down or flat. The well-run stock picking actively traded mutual funds for the most part enjoyed double digit gains through the first six months of 2020. It has been a long time since the actively managed mutual funds have significantly outperformed the indexes, but it just illustrates again that passive investing is not the answer but picking the right investments is.

The NASDAQ Composite had a great month up 6.1% for the month of June and was up 30.9% for the three months ending June 30th. The one-year performance on this index was 26.9%. The Dow Jones Industrial Average was up 1.8% during June, but continues to be down 8.4% through June 30th. The one-year return on this index is -0.5%. The one asset class that cannot get any type of traction has been the Russell 2000 Small Cap Index. While it was up 3.5% in June, it is down year-to-date 13% for the year 2020. The one-year return on the Small Caps is at -6.6%. Just for purposes of illustration, the Bloomberg Barclays Aggregate Bond Index was up 0.7% in the month of June and is up 6.5% for the year-to-date. The one-year return on this index is a 9% return.

 Carter and Josh sharing their vows

   So those of you who are observant will note that the bond index for the one-year period was actually higher than most of the market indexes. However, if you compare the 10-year returns on each of the indexes, you will see the dramatic difference between investing in equities and investing in bonds. The S&P 500 Index 10-year return is 14% annually, the NASDAQ Composite is 18.3%, The Dow Jones Industrials is 13% and the Russell 2000 is 10.5%. As you can see, all these indexes were up double digits while the Bloomberg Barclays Aggregate Bond Index for the 10-year period was a meager 3.8%. Also, with interest rates at almost historic lows, you have to think that the investment in bonds will either be flat or negative over the next one-year period. In most cases, bond indexes being flat would be a positive sign. Yet a 10-year Treasury Bond today is yielding less than 0.7%, which to quantify, on a $10,000 bond is $70 income to you per year. Holding a 10-year bond with such low potential for returns hardly raises a discussion in the area of investing. It is not likely to get better for years.

Almost every day I am confronted by a current client or prospective client in how I square the economic world around me today with my comments to stay fully invested. They wonder what I saw in March that they did not see and what I see in early July that they cannot believe. The common exclamation by prospective clients is that I look around and I see pain and destruction everywhere around me. How could you and the Stock Market forecast better things to come given the dire economic conditions that surround me? My answer to that exclamation is that they are not actually seeing the real economy. They are only seeing what is around them and not examining the underlying figures. It reminds me of Groucho Marx in Duck Soup saying, “Who you gonna believe, me or your lying eyes?” You should have believed me.

One of the things that is most misunderstood by the investing public is that the Stock Market does not reflect the past or the present, it reflects the future. To properly evaluate where stocks will be, you do not worry about where we are, but rather where we will be. Anyone invested in the Stock Market should not be particularly concerned about the economy today but should be more concerned about the economy a year from now. Do you really think that this panic regarding COVID will be around a year from now or do you think that by that time it will have passed?

You do not have to go back very far to understand how great the economy was in February. We were at a 3.4% unemployment in February and today we have an unemployment rate of 11.1%. A huge turnaround in only a four-month period, but those numbers are so truly misunderstood that I thought I would take a second to explain.

Ava, Josh and Carter enjoying the wedding festivities

A large percentage of those people reported as unemployed are actually still being paid. As the Department of Labor pointed out, if you are still on payroll but not employed, you are considered to be unemployed. Even those on unemployment will receive an extraordinary benefit of $600 a week funded by the federal government in addition to the state benefits. While certainly it was true that close to 20 million people, at its height, were unemployed, it is also true that the vast majority of those unemployed were being compensated while not working.

The market was stunned in May when it was announced that 2.7 million new jobs were created. Imagine their total outrage when they realized that another 4.8 million new jobs were created in June. Therefore, over a relatively short period of time, 7.5 million jobs were created in the economy. You do not need to be a rocket scientist to understand this phenomenon. During the 90-day period in the second quarter, the Federal Reserve system in the United States dumped $3.5 trillion into the economy. By most definitions, $3.5 trillion is a substantial sum of stimulus. Not only were there the famous Payroll Protection Plan payments, but also unemployment stimulus and direct loans by the SBA, Small Business Administration. Those investors that were forecasting the demise of the economy just could not understand the benefits of this economic stimulus. Unlike 2008 when the Federal Reserve refused to give money directly to taxpayers, this Federal Reserve bent over backwards to keep the economy stable. The Fed’s work saved the U.S. economy.

As we go into July and the end of the Federal subsidy of unemployment, you will see more jobs created. These jobs will not necessarily be new jobs, but rather the unemployed will be called back to work. With the change in the PPP Loan Program, there was no reason to call these employees back to work quickly. The Congress accommodated them by extending the forgiveness period and allowing employers to bring back their employees as their business returned.

Josh stealing a look at his bride, Carter

I have consistently said that the second quarter will be a disaster from an economic standpoint. I stand by that projection since we have not received the numbers yet, but they will be bad. I forecast the third quarter GDP as being virtually break even and the fourth quarter as positive. All of that is very interesting information but does not account for the huge run up in the Stock Market over the last quarter. Yes, it is true that the market fell 35% during the first quarter but gained 41% since late March; huge swings by anyone’s definition. The winners of the investment game of the first six months were not the investors that tried to time the market by selling and getting back in, but rather were those that maintained their investment philosophy during the six months and did not panic. I read every day about those traders that made millions by buying bankrupt companies, such as airlines, cruise ship lines and retail. That is not investing, that is speculation. Even if you had been in the poor performing market indexes, such as the S&P 500, your loss would have been quite marginal. Market timing has never worked, yet many keep trying!

Over the next month we will see earnings for the second quarter and they will be terrible. Volatility on the market will reach new levels as each company reports their earnings and projections. You will see the active traders move the market dramatically, percentagewise, over this 30-day period. While I am warning you that this is going to occur, I also recommend no changes to our portfolios. At the end of the day, the value of stocks is driven by their future earnings not their past earnings. It is very clear that the vast majority of companies are actually operating at near full capacity and certain segments of the market are not operating at all.

Why the S&P 500 is not performing well in 2020 is relatively simple. This index represents a large block of stocks that represent different segments of the economy. Some are doing extraordinarily well, such as technology, health care and biotechnology, but then others are doing very bad, such as oil, banks, hospitality, airlines and cruise ships. I do not think I have ever seen a quarter with a bifurcation between the growth and value of stocks that has been so great. Growth stocks are up double digits, while value stocks are down double digits. The swing in the composition of stocks has been dramatic. The key is to be in growth stocks, not value stocks at this time. Those that have not looked at their investments lately, need to evaluate where they sit as compared as to where actively managed mutual funds have performed this year.

Every day I read the national headlines on my iPad and shake my head in bewilderment. I really do not clearly understand exactly where we are in this country as it relates to the pandemic. There is no question that there is a huge group of Americans behind the “COVID-shame” mentality. In reading these extraordinary articles, I am just trying to understand their position rather than to argue with them. I guess it could be said that the “COVID-shame” advocates basically do not want America to ever go back to work. In reading the harsh comments regarding Disney World reopening, I find it hard to fathom that people have this much hate. If you are so concerned about the health of the people going to Disney World, the answer is clear. Do not go.

Carter and Ava having fun at the reception

There are many in the media that say the negative comments from the “COVID-shame” people are totally political. While maybe that is the case and their desire is to shut down the economy so that economically we can elect a different president. However, that really defies common sense. Would anyone be so vain and self-centered that they would want all Americans to suffer to meet their political goals? I try to think positively about most people, but I cannot believe that anyone would be so naïve to desire that the country fail economically just so they could change their political agenda. Maybe I am wrong?

COVID-19 is a very serious illness and should not be taken lightly. Everyone should do everything within their power to stay healthy and avoid the virus. However, the situation is far from as dire as the news would like you to believe. In recent weeks there has been a large increase in cases in certain states, however, those cases almost universally are with the young. No one ever actually reports how many of those cases are asymptomatic and how many are actually serious. From day one the reason for the lockdown was so that we did not overwhelm the hospital system. While I read every day of the terrible plight of certain hospital workers, I am less convinced.

As we sit here today, there are 2,200 cases of COVID in the hospitals in the state of Georgia. Certainly, a personal tragedy for those people, but in a state of 10,200,000, it’s hardly a meaningful percentage. No one ever actually reports the active cases versus the cases where people got well. You pick up every newspaper and it says that 3.3 million cases in the United States. However, no one reports the actual active cases. As I write this article, there are 1.7 million active cases in America with a population of 332 million. As you can see, 1% would be 3.3 million, so there are ½ of 1% active cases in America today. So, the critics (or the less informed) would say we only diagnose 1 out of 10 cases, therefore potentially 17 million active cases or roughly 5% of the population. Percentage wise – still very low.

Joe and Ava sharing a coat for the night

Do you remember only four or five weeks ago when the press was proclaiming Europe, and especially Italy, were destined for complete shutdown due to the virus. Has anyone reported lately that Italy today only has 13,300 active cases in the entire country (a country of 60.5 million)? Germany has only 6,194 cases in the entire country (a country of 84 million). In both of those cases almost none of those cases are serious. As it relates to the hospitals, the number of people hospitalized for COVID in the U.S. has never exceeded 60,000. Today the number of hospitalizations for COVID is around 45,000 and, more importantly, the number of people in ICU related to COVID is less than 6,000 nationwide. I need to remind you that in the United States, there are 790,000 hospital beds and over 100,000 ICU beds. As mentioned above, there are less than 6,000 COVID patients with ICU issues. When you look at the numbers, it is hard to fathom just exactly what the media is telling you and why. Do they have the facts?

You read almost nowhere that the number of deaths from COVID are falling and are averaging less than 1,000 per day. To put it in perspective, the fact that almost 8,000 people die every single day in the United States from natural causes, doesn’t seem to be a meaningful number. Due to the U.S. government’s infusion of capital into biotechnology, there is a strong likelihood a vaccine will be available before the end of 2020. Almost assuredly a vaccine will be widely available early 2021, as the government is funding the process.

The drugs needed to help patients have dramatically improved and the period of time people need to stay in the hospital has been significantly reduced. None of this seems to make it to the headlines, only the states, cities and counties that have an increased percentage. I am not suggesting that everyone should not be as careful as possible as to not get sick. What I am saying is that there is a lot of people that will get sick, but will get well. The young people, being younger and stronger, will weather the disease quickly and will return to their normal life. In the meantime, America needs to quit figuring out a way to avoid commerce and quit making everything political and needs to get back to work.

I wrote a few months ago about the unbelievable American spirit that would overtake the economy and bring it quickly back. We see it every day around us, people working from home and not driving to work. The building in which I am in is almost totally abandoned from workers, but I suspect all are paying their rent. Many of the so-called “economic forecasters” gave us the explanation that there would be huge home foreclosures during the pandemic. In fact, the opposite is true. There is an economic explosion of house buying from people that want to get out of the cities and move to rural areas. Homeowners’ interest rates are at all-time lows and homebuyers are everywhere. Yes, it is true that certain industries are not coming back as quickly, but as I drive home every day, it is kind of funny to see the cars lined up and down Peachtree Street to enter Lenox Mall.

DeNay of Rollins Financial taking a horseback ride through the trails  

What I know is that the American spirit is certainly working and as we start the third quarter, it will be up and down but progressively higher. Because unemployment benefits are running out in July, people will go back to work because they have to. But have you checked the vacancies at beach towns lately? Hotels and rental units are reporting maximum utilization even during this pandemic. Does anyone really think that the vast majority of Americans would be going on vacation if we were in a recession and not being paid?

Every day I read some “so-called” expert, who exclaims in almost hysteria, that the market is so grossly overvalued that we should see a 25% reduction almost any given day. I am not exactly sure how they define overvaluation, but if you assume my prediction is correct then the market is a long way from being overvalued. If we assume that earnings come back in 2021 and 2022 as they were in January of 2020, the market is not overvalued but in fact trades at a reasonable valuation. If we assume that the American population will be either exempt from COVID by herd immunity soon or because a vaccine has been made available to the general population, the economy will come back in a rewarding fashion. With the amount of governmental stimulus and historically low interest rates, we are already seeing the first leg of the market up.

It is not unheard of that the traders will try to push the markets around and try to force you out of your position in the third quarter. It is believed that currently $5 trillion in cash is sitting in investment accounts waiting to be invested. While a pullback in the market over the short term seems tragic to your finances, it actually may be the very catalyst that pulls this cash back into the market. At some point the people that sold out in March will feel an obligation to reinvest and will come roaring back. It will happen.

Dakota, Joe and Ava following the ceremony

My current projection from an investment standpoint is that the third quarter will be either flat or marginally negative and the fourth quarter will be up significantly. I see by the fourth quarter of 2020 that the economy will begin again to expand, and employment will be once again in short supply. We will not reach full employment by the end of 2020, but should once again be fully employed by the summer of 2021.

None of the current living economists have ever witnessed a stimulus package like we have seen over the last six months (mainly since it has never happened before). $3.5 trillion of government money has been poured back into the economy and to think that that stimulus would not bring commerce was naïve. I reflect now on those terrible days during March when one professional after another forecasted a period of time worse than the Great Depression. However, we have already come back to a market that is essentially even for the year and this great recession, as forecasted by these “so-called” experts, may only have lasted one calendar quarter; the last one, not the future ones.

As we go forward, I expect the market will fluctuate wildly on days, but the trend is most assuredly up. I forecasted at the beginning of the year that the markets would enjoy a 10% gain in 2020. While we have seen movement all around that projection, I still think it is reasonably possible we could have a return as good as 10% in 2020.

On that note, come visit with us and discuss your goals and financial plans. If you are interested in discussing your specific financial situation, please feel free to call or email.

As always, the foregoing includes my opinions, assumptions and forecasts. It is perfectly possible that I am wrong.

Best Regards,
Joe Rollins

Wednesday, July 1, 2020

Happy 4th of July!

In observance of Independence Day, the offices of Rollins Financial and Rollins & Van Lear will be closed on Friday, July 3rd. We will re-open for business on Monday, July 6th at 8:30 a.m.

Image result for 4th of july

If you have any pressing matters that require immediate attention, please do not hesitate to contact any of our staff.

Please be safe, and enjoy the holiday! 

Best Regards,
Rollins Financial, Inc.