What should we do?
The same question that is asked in every perceived crisis.
This time it is different! Sound familiar? Over the course of the last century, that is the statement you read and heard in the media. It might change our thoughts or make us more aware of how quickly things can disrupt our day to day life but there has been no indication that we will not get through this. Should we take precautions, yes. Change totally how we conduct our lives from the stand point of business and future lifestyle choices, not likely. We still need to work, eat, travel and take care of one another. Perhaps a little more cautiously but life must go on. So too with the markets. Emotion is unpredictable. Period. We are never sure how others are going to react to unexpected news but panic is almost always the wrong choice. We may not like what is happening and we may want answers immediately but fear of the unknown is not going to help. We do not have all the answers but we do know that humans are adaptable and we always find a way. We have learned that Capital Markets rise, they fall and then they rise again. The world in which we live is a capital market consumer society. Wealth in publicly traded companies has continually grown over recorded time. Not every year but winning years far exceed losing years. There is not one segment of the market that consistently outperforms over another. The best defence is to be well diversified and to stay the course. We have had discussions regarding a well diversified portfolio, risk tolerance and it all comes into play at times such as this. It wasn’t that long ago that we went through these emotions in 2008 - 2009. Lest we forget. The market dropped by 50%. We made it through that crisis and that is what paved the way for the expansion of the last 10 years. Emotions are running high, fear and panic is evident. We need to stay grounded, remember our investment discussions and the reasons for our choices. Please reach out to me if you feel that further explanation is warranted.
Below we have attached some articles and links you will hopefully find timely.
What investors should do as we enter a bear market
The Dow just tumbled into a bear market — here’s how long those downturns last on average
Six strategies for volatile markets
The Investment Junction - March 2020
Covid-19 goes global - April 2020