Article

Market Update

by
Zacc Call

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Market Update

A global health crisis brings the importance of health in to focus.  We hope you and your family is healthy and safe. Today, the S&P 500 is 15% down from the record high.  Technology and improved supply chains has created an increasingly connected economy.  At first glance, it is hard to see how Coronavirus, or COVID-19, could have such an impact on the world.  The virus itself has not, but the efforts of containment create impediments to production and distribution lines.  However, the greater effect is derived from sentiment.  How it “feels” has a self-fulfilling effect.  As investors fear, they sell, as they sell, it can create downward pricing pressure.


Here are several quick items to consider:

  1. Markets typically drop faster than they climb.  The saying is “the market takes the stairs up and the elevator down”.  
  2. The S&P 500 is at the same level as October 2019.  At that time, most of us were satisfied with the previous gains.  Somehow retreating to that level after having been higher is more painful, but not more impactful.    
  3. In last 5 working days, our 6 advisors had 86 meetings with Capita clients and prospects.  Prior to those meetings, our support staff prepares a risk assessment of each portfolio in our software which scores the portfolio on a scale of 1 to 100. For reference: The S&P 500 is mid 70s score.  A conservative bond portfolio is about a 20 to 30.  We find that most of our clients’ portfolios result in a score between 40 and 55.
  4. We are careful to include market protected or market “less affected” investments in your strategy for any money you plan on using in the short term.
  5. The market has climbed the wall of worry. See the below graph for some examples.    
  6. We are here to review your portfolio with you. Our managers are analyzing each of their positions. We are happy to discuss the details. While we don’t anticipate making major changes at this time, we would like to collaborate with you to ensure your allocation matches your goals and comfort level.

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