What is going on with the economy? We are seeing unemployment rates that have not been seen since the Great Depression in 1929.

These high figures do not reflect some people who are working part time or are underemployed. We are starting to see some help-wanted signs at large retailers and fast-food restaurants. The CARES Act can hurt the unemployment rate if people receive more in unemployment benefits than by working.

The situation is so complex, it is hard for the right hand to know what the left is doing.

After two months of forced shutdown for many businesses, we do not know how many might not reopen. J.C. Penney declared bankruptcy, joining several other department store chains to do so recently. Penney announced plans to close at least one-third of its stores. Losing an anchor in a mall can cause smaller retailers to close because there is not enough traffic.

Some major companies have announced that many of their employees will be working from home. This could cause some office buildings to go vacant and others not to be built, which could affect many jobs. Restaurants are doing a fraction of their normal business and many may not survive. Airlines, hotels and entertainment facilities are struggling. Many of these companies will have large quantities of bonds maturing soon, which could wreak havoc on financial markets.

The deficit is growing very fast and the Congressional Budget Office forecasts that total federal debt will top the total economic output of the United States this year. Wow! This is a serious situation.

The good news is we will recover. The question is when?

The stock market might be way ahead of itself. It fell to its low on March 23, then it surged 31%, the biggest one-month gain since 1938. This is still down double digits from where was earlier in the year. Things might not be as good as they seem.

The Standard & Poor’s 500 is weighted by market capitalization, which means the values of all stocks and bonds are considered. Five large technology stocks make up a huge part of the gain. The other 495 stocks are not doing as well.

The current forward P/E ratio is 20.5X compared with an average 15.2X. This is the highest since the tech crash in 2002. There are a number of technical indicators that could be troubling. Maintaining your positions may be appropriate, but be careful placing new money in unless you have a long time frame and a well-positioned written financial plan.

If you have a mortgage or other debt, interest rates may never be lower than near zero. Thirty-year government bonds are paying only in the neighborhood of 1.2%. That is a long time to tie up money at such a low rate. Some countries actually have negative rates, in which you pay the government to hold your money! A few weeks ago, some oil companies were paying people to take their oil because of a lack of storage tanks.

These are unusual times.

There is a lot that scientists do not yet understand about this virus. Can we get it again? Will there be a vaccine? How is the best way to treat it? Will there be a second wave this fall or winter?

Many things will change and we are far from knowing all of the answers. The greatest minds in the world are working on these problems and, eventually, they will find an answer. Start today to prepare your family financially based on math and science. This will help to protect them from whatever happens.

Put your finances is the best possible place by making choices based on the new normal.

Gary Boatman is a Monessen-based certified financial planner and the author of “Your Financial Compass: Safe passage through the turbulent waters of taxes, income planning and market volatility.”

To submit columns on financial planning or investing, email Rick Shrum at rshrum@observer-reporter.com.

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