Thank you for the trust you have placed in us over the years. For nearly two decades, we have come to work every day with the single goal of helping you exceed your long-term financial goals. Sometimes, that journey can seem quite smooth. At other times, however, the path to your financial future becomes more arduous, and the journey becomes uncertain. The past six weeks have tested everyone’s resolve, as uncertainty about the Coronavirus and its impact on the economy have caused heightened volatility and declining stock prices. Unlike past periods of tumult for the market, this episode has another component – concerns about our health and the health of our families and friends. If the past is any guide, this too shall pass, but it will take time. The stock market and the economy have been tested many times over the past century, and each time they have ultimately come back stronger. For now, though, we would expect uncertainty and heightened volatility to stay with us.
TRYING TO MAKE SENSE OF THE RECENT PAST
Over the past six weeks, market participants have witnessed history being made several times. From February 19th (the all-time high for major indices) to March 23 (the recent trough), the equity market declined 33.9%, the steepest and quickest drop on record. A day later, it began its best three-day run since the Great Depression. Notably, most of the largest one-day moves in the market have come in the middle of a bear market. According to the Bloomberg, “The markets moved an average of 5% per day in March, the most for any month on record.” The unprecedented volatility across all asset classes – from perceived safe havens like gold and Treasuries to riskier assets like stocks and fixed income – has raised many questions for investors. We attempt to answer some of the many questions below. Given the speed at which all of this is taking place and our singular perspective, we don’t have all of the answers. We do have a time-tested process that can act like a roadmap during uncertain times.
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