JP Morgan’s effect on your account

A longtime friend and colleague Geoff Kanner, CFP® recently sent the following message to his clients. Since he said it well, I thought I would simply pass along his message.

I wanted to get an update out to everyone concerning the loss that JP Morgan has incurred.

First, it has no direct effect (and very little indirect effect) on your account(s) at all, other than to give you another reason to worry about the economy and financial markets.

The 2 billion dollar loss occurred at the JP Morgan Chase top "level". It was caused by people on the corporate level hedging against corporate losses. They were "playing" with JP Morgan money.

It did not involve client money. If you owned JP Morgan stock directly, the value of the stock has dropped. I do not know when or if we will be able to determine what part of the loss is due to the JP Morgan loss and what part is due to the on-going market issues caused by Greece and France.

As with many large corporations, JP Morgan Chase is many companies operating under one brand name. What happens at one company does not affect the financials or operations of another company.

The managers of the mutual funds within your accounts operate completely separate from those in the commercial banking, investment banking etc. divisions.

While we are all still awaiting additional information from JP Morgan, I can assure you that there have been multiple due diligence calls to determine if any action needs to be taken to safeguard your account. All of the asset management companies that we recommend, have come to the same conclusion — We are all satisfied that no action needs to be taken for clients who use JP Morgan.

I look at this as further support for the need for well diversified portfolios. Portfolios that are designed to reduce your risk.

If you have any questions or concerns we are here to serve. Give us a call.