SW Investment Weekly Commentary 03.12.20

SW Investment Weekly Commentary 03.12.20

Over the years we have often weathered market, political, and financial turmoil that rattles the most seasoned professionals – and throughout these periods of turmoil StratWealth’s commitment to our investment discipline has prevailed.  

Today is no different!

We remain patient and vigilant (as well as confident) as the panic-driven market activity does not alter our investment thesis.   Our diversified investment portfolios, planning process, and long term investment outlook are designed to weather a “Coronavirus driven market selloff”. 

But let’s be clear, the COVID-19 (Coronavirus) outbreak is first and foremost a human tragedy, effecting millions of people. The outbreak is moving quickly, with events, schools, and travel being shut down daily. And although this letter is intended to provide you, all our clients, with a perspective on the evolving situation, we also want to offer our prayers and well wishes to you and your loved ones to be safe during this unprecedented time! 

Your StratWealth diversified investment portfolios are strategic portfolios tailored to your unique risk profile, and more importantly, your investing time horizon – which accounts for exogenous events such as what we are seeing today. Although not unscathed by the recent declines, our commitment to diversification intentionally seeks to mitigate market risk and we are confident that your investments will subsequently recover. 

The United States Government is responding to the Coronavirus healthcare crisis by announcing several containment measures. We see these as positive measures:-

  • Washington has announced several policy changes targeting small and medium business.  Also, given the lack of a medical solution to combat the Coronavirus, the government appears to be deploying a containment strategy by banning any flights from Europe for the next 30 days except for the United Kingdom. Many States and Municipalities are also enacting containment measures. 
  • The Federal Reserve announced today, March 12th, that it will initiate a $1.5 Trillion purchase designed to inject liquidity into the capital markets.  In addition, the European Union Central Bank announced it would relax Bank capital controls as well as enact a lending mechanism (LTRO) targeting small and medium business. 

In the face of all this, our US economy remains relatively strong – in fact we posted strong jobs/employment numbers just last Friday! But if the containment strategy serves a deeper blow than expected to Wall Street, meaning corporate earnings flat-line as we slow spending, shopping, or travelling and so forth, we increase the possibility of a recession.

On the brighter side, according to health officials, the warmer days ahead of us should adversely impact the growth of infections. We are all hopeful that the Coronavirus does not like the sun!

Finally, your StratWealth team won’t skip a beat! We have carefully prepared for the worst, which for our crew would mean wide spread quarantine to any of our three offices. Our team of Advisors, support staff, and financial professionals can collaborate anytime, anywhere on mobile or desktop while meeting our compliance and security needs. We truly can operate from the ‘cloud’ – and we are ready!

As always, we welcome any calls or questions you may have. Feel free to reach out at any time for an update on your personal planning matters. We are here for you!

Regards,

Your StratWealth Team

For important disclosure information, please visit: https://www.strat-wealth.com/disclosures