CoronaVirus and your Investments

We hope you are making the most of our new reality of social distancing.  I am personally using this season to connect with family and neighbors and enjoy the outdoors all from an appropriate social distance.  That is, while I am not keeping a close eye on the markets.  Keeping an eye on things is our commitment to you.  My team and I have been closely studying the situation and tuning into many conference calls to keep current and help guide you through this time.

The market’s reaction to the COVID-19 has been swift, in fact this is the fastest the market has ever declined like this in history.   Our analysts had this take “One of the fastest bear markets ever seems to have been driven by short-term traders, rather than long-term individual investors.”

In times like this, markets tend to overreact to the downside especially in the face of uncertainty and we just may be seeing peak uncertainty.  I am following this very closely and I think we will get some more clarity on the trajectory we are on in the coming week or so and as more tests come back.  Any kind of clarity, even if it’s worse, could help. 

Additionally, I feel good this time around because the Federal Reserve (Fed) appears to be on the case.  A big policy criticism during the 2008-9 financial crisis was the Fed was late to respond appropriately. 

I still remember watching live the day Congress voted down a needed stimulus package and the markets tumbled on the news.  I do think Washington is on the right track with their responses but legislating is messy business and they will likely get it wrong a few times before ultimately getting it right.

Markets generally bottom before the news actually gets better, it sort of “sniffs it out”.  So remember the headlines can and likely will get worse from here.  But the market will be looking for a bottom ahead of when the headlines get better.  Our top analysts in our firm think we may already be in that window of time where the market could bottom in the coming months. 

“We believe stock markets could significantly recover in the second half of the year as any real economic impacts are short lived. The U.S. was in one of its strongest economic positions prior to this, and combined with the pent up demand created by the recent measures, it is likely that we will bounce back in record time.  …  Stocks typically begin to rise three to six months before a recovery. We believe we're already in that window. Stocks will begin to recover long before the pandemic effects begin to wane.”

We don’t want to sell stocks down here because it could be a bigger mistake, and worse, one we could likely never recover from (because we would likely miss the recovery).  However everyone’s situation is different and you should review with your Advisor.

But take heart, remember this is but a moment in time, and the stock market has a 100%, perfect track record, of always recovering in the past. 

Call us anytime, we are forwarding our office lines after hours and even on weekends or evenings if need be.  We will keep in touch throughout this time with more info and insights into the market as I get it.

^{Past performance is no guarantee of future results}