A Letter to Our Clients
The Markets, COVID-19, and our Response.
A Letter to Our Clients
I am sure many of you are concerned about the Coronavirus and how it is affecting the market thereby your personal accounts. It appears that the U.S still doesn’t have a clear plan on its approach to testing and containment yet. In addition, this seems to be a multi-country crisis, which means that all of the countries will need to work together towards testing and containment, until this happens we will continue to see a great deal of disruption and volatility in the market.
Some of the actions that have been taken as it relates to the financial markets are the interest rate cut of 50 basis points by The Fed last week. In anticipation of the cut the markets had a strong rebound. The rebound was temporary but this cut will be beneficial over the long run.
I wanted to reassure many of you, that we have positioned all portfolio’s over the past few years with the anticipation that there would be some type of correction. Corrections, are a part of the history and inner workings of the market and do pass over time. Our strategy is that we maintain the current positions; we do not liquidate positions in a falling market. We will also take advantage of the lower prices and recommend purchasing some stocks that had gotten too expensive prior to this crisis. The obvious choice would be the travel industry, but there are many other industries and specific companies that are being deeply affected. As we move through this crises, I may be making recommendations company wide for the purchase of some stocks that I believe will rebound strongly. I will send an email to all of you, with the opportunity to let me know if you are interested in the purchase and how many shares. I will then make bulk purchases and will distribute the stock accordingly.
As a reminder, bear markets happen and they pass, typically lasting less than 2 years. Bull markets typically run an average of 6.6 years, and the market has grown 12.2% on average.
In closing this too will pass. Our job as your Investment Advisor is to stay the course and continue to make wise investment choices for each of you.
Please reach out if you want to discuss this in further detail.
Vanessa & The ITFS team
In Touch Financial Services
Registered Investment Advisor