Well, 2020 is, so far, the year of surprises. First the killing of Iran’s top general by a US drone strike, followed by the Iranian army shooting an unarmed airliner out of the sky and now the spread of the Coronavirus which started in Wuhan province, China. Read <here>
Predictably, concerns over its affect on the health of the global economy has seen stock markets pullback, pricing the fear of the unknown into current prices. The fundamental concern is that this shock will offset the positive effect of the US-China trade deal which has eased geopolitical tensions. Gold rallied and oil prices fell, further underscoring the fears of a global economic slowdown.
So what should investors do? First, remember that stock markets incorporate all known information into stock prices, so market volatility is entirely predictable. Second, that the institutional wealth management companies we partner with have successfully navigated through volatile markets over the decades and we have tremendous confidence in their ability to do so this time. Third, market corrections present buying opportunities where stocks are now more attractively priced. Fourth, this too shall pass. Perhaps not quickly, but stock markets are the quantification of human progress and no single event -including this one- will stop our relentless advance.
We’re not quite a month through this year, so let’s take a more circumspect view of January and recognize that there will all but certainly be more surprises before year-end, some of them likely to be positive. Yet the certainty that well-diversified portfolios have created meaningful wealth for clients over time should give investors the peace of mind to look beyond this month to better news ahead.
We’re watching your investments closely and you’re in safe hands. Call me though if you’d like some additional perspective.