Good afternoon. Just another glorious day here at Investment Headquarters... 🤣 Today was an ugly day in the markets. Worst one-day point drop in market history. Just brutal. Good news is that not one of you sold any of your stock market investment today so it's just a drop on paper. A big drop for sure but only on paper. Although it probably seems like a lifetime ago, just this past Friday the market had one of it's best days ever. There's so much up and down going on right now as the world tries to determine what the financial ramifications are of the coronavirus. Given the massive swings we are experiencing, I want to strongly suggest to all of you to stop focusing on the short-term and continue to keep a long-term perspective as difficult as that may be. Here's my latest take - this is a MEDICAL crisis not a MARKET crisis. It could turn into a MARKET crisis down the road but all signs point to the markets working efficiently and without any major dislocations. MEDICAL crises are temporary and if we believe the information coming out of China and South Korea they are absolutely seeing a drastic slowdown in the spread of the virus. When investors finally see light at the end of the tunnel that the world isn't coming to an end, we should see markets begin to come back to normal. How long might that take? Who knows is the real answer but if I had to guess, I would suggest the answer is within a couple of months. Until then I think we very well may continue to see dramatic highs and lows for multiple trading sessions in a row. The question I want to ask all of you who are sitting home worried and nervous about their finances and portfolios is : "Where do you think markets will be 5 years from now?" Notice I didn't ask where they would be next month, or the end of the summer or even the end of 2020. I asked where they would be 5 years from now. In my humble opinion, I think they will be higher than they are right now. They could be a LOT higher too. So as long as we believe that stock markets will be higher than they are 5 years from now, we stay invested. Also, I think it's important to differentiate between how you FEEL about the markets versus what you THINK is going to happen. It's virtually impossible for investors to naturally FEEL positive about the markets given all of the negative stuff coming at us at warp speed. So it's pretty much a given that everyone FEELS like the markets are gonna plunge even more and there's no hope for a recovery anytime soon. But if you take a step back, remove emotions as much as humanly possible and THINK about where markets are going to be 5 years from now, I suggest that you won't be quite as panic stricken as you may be now. Yes, this is gut wrenching to go thru and yes it causes me to stay up at night but Al and I have done a lot of work preparing you and your portfolios for an eventual downturn and now is when we stick to the plan. It would be one thing if we had all of your money in the stock market and had no exposure to fixed income, real estate, annuities with downside protection, structured notes with downside protection and other non-correlated investments. But that's not the case. We're well diversified across different parts of the stock market, bond market, real estate market, insurance market, options market, etc. You own investments from top quality investment firms like Blackrock, Pimco, Lord Abbett, Guggenheim, Blackstone, Goldman Sachs, JP Morgan, and more. You own combination of various vehicles which may include ETFs, mutual funds, non-traded REITs, variable annuities, structured notes, and more. Not everything is tied to one industry or one sector or one company. That's what should help you (and me/Al quite frankly) sleep better at night. I suspect Al and I will continue to play the role of part financial advisor and part emotional counselor until the crazy volatility dies down. It could take awhile or it could begin dissipating almost immediately. No one knows. So we are going to stick with controlling the things that we can control and not worrying too too much about the things we cannot. Finally, we are obviously trying to be as flexible and accommodating as possible with our staff. With kids home from school for at least a few weeks, several staff members will need to work occasionally from home but we intend on having coverage at the office everyday that it remains feasible and permissible. Once in a while you may get voicemail instead of having someone pick up our phones but we promise to return everyone's calls as quickly as possible. I also encourage you to send an email to one of us if you're not able to get someone on the phone immediately. We are trying the best we can to deliver the very best client service possible given the extenuating circumstances and there's no doubt some adjustments will need to be made along the way. As I stated in an earlier email, we're all in this together and together we will get through it.
Stay the course my friends!! All the best, Steve
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes. The purchase of certain securities may be required to effect some of the strategies. Investing involves risks including possible loss of principal.