Broker Check

Market Commentary

March 18, 2020


Coronavirus (COVID-19) and Market Volatility   

We are reaching out during this challenging time presented by the Coronavirus (COVID-19) pandemic.   First and foremost, we hope you, your family and friends are well and taking all of the recommended precautions to stay healthy, including social distancing guidelines directed federally and locally.

Our primary goal is to reassure all of our valued clients that, as your Investment Advisor, we are working diligently to steward your financial assets in a prudent manner that keeps a focus on your long-term objectives. Looking forward and beyond what is directly in front of us is imperative.

The market downturn from all-time highs in late February has been both swift and sharp in magnitude with volatility measures hitting all-time highs and surpassing levels not seen since Q4 2018 and the Financial Crisis over 10 years ago. Fear and uncertainty of the unknown has gripped the global markets prompting intervention by the Federal Reserve and other central banks to inject needed liquidity into the financial system.

The Fed’s substantial and massive efforts are being done to help ease economic uncertainty and challenges as recession risks have risen significantly.

They include:

  • Cutting interests to 0.0%-0.25% in two separate emergency moves
  • Launching a new $700 billion Quantitative Easing program
  • The Treasury gave the Fed additional authority yesterday for up to $1 trillion in short-term lending for businesses to operate  
  • A Fiscal Stimulus Response Bill, as much as $1 trillion, is pending in Congress and will include direct payment checks to Americans

We have had an unprecedented seven straight days that the Dow has moved +/- at least 1,000 points, and tripped NYSE circuit breakers on three of those days. We’ve had the largest single-day point declines and gains in history during that stretch.

These types of markets are never easy to go through. However, as we have seen in past corrections both large and small, including those surrounding health epidemics*, markets recover in time. We believe this will be the case with Coronavirus (COVID-19) as well, but it will take resolve, patience, and confidence in the process. Missing just a few of the market’s best days can really hurt investors long-term returns. Trying to time the market is not only impossible, it can be very costly. This illustration is included on page 2 of the informative piece “How to Handle Market Declines” from one of our partners, Capital Group.   

Volatility remains in the forecast for the foreseeable future and we urge investors: 

  • Refrain from making large portfolio changes
  • Maintain a long-term perspective
  • Stay Diversified

Many of our social norms and routines have been disrupted to help flatten the curve of COVID-19 coronavirus spreading and ultimately help shorten the return to normalcy. This can only happen with all Americans on board, adapting and working together. Difficult times and challenges have also created great opportunities. We as a Nation, have always risen to the occasion during these challenging times.  

Use this helpful resource from the CDC-Centers for Disease Control and Prevention to stay healthy and for FAQs: 

CDC Coronavirus Guidelines

If you have questions or concerns, please call your Nelson Advisor at 800-345-07593.

We want to thank you for the confidence you’ve placed in Nelson Securities over the years in both good and challenging times. Be safe and well, and we’ll get through this together.

 

Sincerely,


Your Nelson Securities Team


*Past Performance is No Guarantee for Future Results