We have received some calls this week from clients expressing concerns about the recent collapse of Silicon Valley Bank (SVB) and Signature Bank. With all the headlines and mixed messages out there, it is natural to wonder what this will do to the markets or what it means for you.
Here are a couple things to note:
- Our clients have no significant exposure to the common stock of either of these banks.
- Our ability to serve our clients will not be impacted by these recent events.
- The Federal Deposit Insurance Corporation (FDIC) insurance was designed to help protect your funds once deposited in a bank. The FDIC is an independent government agency that protects bank depositors from the loss of uninsured deposits at an FDIC-insured bank. This organization oversees FDIC deposit insurance, which protects bank customers if an FDIC-insured institution fails. In other words, FDIC insures your money at the bank. In the event of a bank failure, the FDIC provides depositors with an insurance payout of up to $250,000 per depositor, per institution, and per ownership category.
- With SVB and Signature Bank, banking regulators took the extraordinary step of designating both banks as systemic risks to the financial system, giving regulators flexibility to backstop the uninsured deposits. Regulators hoped that by protecting these deposits, they would bolster confidence in the banking system.
Market volatility is normal for a healthy stock market. Historically, a period of volatility is more often followed by upward growth than by a downturn. Disruptions in the market can create buying opportunities, which we are always keeping an eye on for our long-term investors.
While the news headlines may try to cause panic, it is important to remember not to let fear or emotions influence any investment decisions you make. You can always turn to us for guidance so you can stay on course toward your financial goals.
If you have questions about your individual situation, please contact us at 309-699-6608 or email your JGA advisor directly.
We appreciate the trust you place in us.