The U.S. is on the path to opening up. “All 50 states reopened to some degree,” observed The New York Times in mid-May. The change represents progress and is certainly good news for those whose businesses and jobs have been adversely impacted by the shelter-in-place orders. It’s also a reason for caution from a health perspective. A rapid attempt to return to normal could lead to an unwanted jump in new coronavirus cases and potentially a reinstatement of shelter-in-place orders.

Ever since bottoming in mid-March, the stock market has been reflecting increased optimism about an economic recovery. The letters “V,” “U” and “W” along with Nike’s trademark swoosh have been used to describe what the trend in economic growth might look like if plotted on a chart. Which shape will best exemplify reality remains to be seen. While some people are eager to get out and visit restaurants, get their hair cut or reengage in other activities, others remain cautious. Those in this latter group continue to limit interaction to the extent possible. Business owners, corporate executives and managers face the challenge of determining how they can prudently bring their employees back to the workplace following new rules and concerns about safety.

There are more unknowns than what is listed in the paragraph above. Strategists and pundits are trying to make predictions about a novel virus, not a financial-, business- or commodity-related shock to the economy. Adding to the uncertainty is human behavior—how quickly people will feel comfortable reverting back to their pre-pandemic lifestyles and how vigilant people will be about protecting themselves and others.

It can feel psychologically comfortable to shy away from equities when there is a high level of uncertainty. It can also feel good to allocate more to stocks when the market has strongly rebounded. Basing your allocation decision on how you feel is not a financially sound decision. Could you get lucky and have good results? Sure. You could also buy a winning lottery ticket. Neither is a strategy you should rely on for building long-term wealth.

Rather, we think you should follow a rules-based approach. Having a set list of rules governing your investment decisions helps to limit the impact of emotions on your portfolio decisions. Rules also can give you the confidence of knowing you are on a specific path when it seems like everyone else’s compasses are spinning.

To assist you in becoming an effective manager of your own assets, we’ve started a new project—a project so new, we haven’t given it an official name yet. Rather, we’re simply using the code name of “The AAII Way.” In simple terms, it is a process for creating your own personal investing plan. Once completed, you will have a roadmap for building and managing wealth that you can follow—or give to a financial planner to implement. It will guide you to make financial decisions in a systematic, rules-based manner.

Some you of may have already read about it in my weekly Investor Update commentary. For many other AAII members, this will be the introduction. An overview of the proposed process can be seen here. More about it can be found at www.aaii.com/AAIIWay. Read it, test it out and give us suggestions on how it can be improved. We want it to be useful to you.

The process starts with defining your goals and cash flow needs. Among the biggest financial goals for many people is funding retirement. Social Security benefits go a long way to helping many Americans achieve this goal. The general financial rule of thumb is to delay claiming as long as possible to maximize benefits. The impact this has on reducing a portfolio’s longevity risk (the risk of outliving your savings) varies by the level of wealth one has. Long-time contributor William Reichenstein shows the relationship of postponing benefits and wealth here.

Finally, if you have yet to tune into our weekly webinars please do. We’ve been covering a variety of topics and have had great guests joining us, including SEC chairman Jay Clayton. You can see an edited transcript of the town hall we hosted with chairman Clayton and SEC education director Lori Schock here. You can also register for upcoming webinars at www.aaii.com/webinars.

Wishing you prosperity and good health,