In this crazy time, I want to start by wishing everyone my best and hope that all are healthy and staying safe. Nothing is more important than your health and wellbeing.
As always, I want to thank you all for being such great clients and friends. Let me also thank you all for trusting me with your hard-earned money and financial security, particularly in this trying time. Many of you have trusted me with new investments this year and to those that have helped me with referrals, a special thank you. That vote of confidence means so much to me.
What a start to the year. January looked good for us and then the Coronavirus happened. This very serious health issue has taken a huge toll on many families as well as on our finances. The three major market indexes are down over 30% from their highs and have wiped out years of gains. Last week, we saw bonds and gold also sell off as there was a rush for people to get liquid at any cost. There have been more days of big swings than most of us have ever seen.
What’s an investor or advisor to do?
While it is difficult to do, seeing past this crisis and what the world will look like after it is over is what I suggest. The stock market is supposed to be a forward look at companies’ financial capabilities. Right now, the economy is hurting as people are in various states of quarantine. But as seen in China, Korea and other countries, there is a way and time period to get through this. I cannot tell you how long this will last but one day, like many other epidemics and pandemics that we have seen in prior times, this will be in the rear-view mirror.
Often people make investment decisions based on emotion and that has proven in the past to be the worst thing that one can do. Warren Buffet, the famed investor, coined the phrase “Be fearful when others are greedy, and be greedy only when others are fearful.” It is very hard for most folks to do but I am trying to follow his advice.
One day, the Coronavirus will be gone. People will come out of their homes. The measures taken now will “flatten the curve”. Work will begin again under normal conditions. People will travel again. When that happens, the government and Federal Reserve will have provided trillions of dollars of stimulus. Interest rates will be very low on historical terms. Gas and oil will be less expensive than in years. An economy that was very strong pre-Coronavirus will have more fuel than it had prior to this global crisis. When that happens, we could see renewed growth and higher levels in the markets than we had seen before the virus struck.
I am not predicting a bottom nor saying that this crisis is over. I am saying that the world will be ok sometime in the future and that financial markets have rebounded in the past after many different types of crises.
I continue to evaluate my clients’ investments to help make sure they are in line with their objectives, risk tolerance and time horizon.
Thank you very much. I look forward to seeing you all soon and celebrating the end of Coronavirus.
Past performance is no guarantee of future results. Investing involves risk and the potential to lose principal. Indexes discussed are unmanaged and you cannot directly invest into an index.
This communication is meant to be general. It is not investment or financial advice or a specific recommendation of any kind. Opinions and forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time. Actual results could differ materially from those anticipated. Please consult your financial advisor before making financial decisions. (03/20)
Jordan Kerner
Financial Advisor, Waddell & Reed, Inc.
Office: 475-619-2240 | Cell: 917-301-7274 | Fax: 203-557-6262
www.jordankerner.wrfa.com | jkerner@wradvisors.com
495 Post Rd E Ste 209| Westport, CT 06880