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Staying the Course Thumbnail

Staying the Course

Austin Colby, CFP®, MBA

These past few weeks have seen extreme stock market volatility, the WHO declaring a pandemic, and the U.S. implementing travel restrictions and many other measures (with more to come, assuredly) to help combat the spread of the COVID-19 coronavirus.

During turbulent times such as these, it can often be difficult to know where to keep your focus.  As we are seeing all around us now, it can also be difficult to stay calm in the face of uncertainty. Fear is never a good decision-maker. Common sense is good (washing hands, staying away from large gatherings, protecting vulnerable demographics), but fear-based irrational behavior is not (fighting over water bottles, emptying out shelves of toilet paper, spending $80 on 6 ounces of hand sanitizer). We do not know what news is to come, but it is highly likely we will continue to get negative reports inside the U.S. before we see ones that are more positive. China has declared that the peak of new cases has passed, as new cases of infection in Hubei (the epicenter) fell to single digits for the first time. That is encouraging.

At The Wealth Group, we are focusing on two missions: taking care of our clients, as always, and taking care of our health, and by extension, the health of others.

In taking care of you, we are rescheduling in-office meetings in the coming weeks to future dates, as well as offering phone/Zoom/email updates in place of our regularly scheduled meetings. The entire team has the option to work from home during this time, while Mike and I will be expanding our available office hours as needed. For clients with taxable (or after-tax) investment accounts, we have been making lemonade out of lemons through tax-loss selling.

Our Outlook

You have often heard us say that we don’t know when investments are low or high; we only know lower and higher. Right now, U.S. stocks as measured by the S&P 500 have seen a 25%+ reduction from its February highs. It may well go lower in the short-term. Historically, stock markets “get ahead of the news.” When information is lacking, markets tend to overact, both on the up and down. Markets tend to bottom while the news is still bad. As with all past bear markets, we anticipate the U.S. market to recover over time. We are not recommending major shifts out of equity positions at this time. 

As always, please reach out to schedule a time to chat with us if you have any questions, or just want to check in. We have been overwhelmed and extremely grateful for the number of clients that have reached out just to check on us in the past couple of weeks. 

Both hope and hopelessness are contagious. We choose the former and highly encourage all of you to do so.