Today is another tumultuous day in the global equity markets. The White House public address about the coronavirus pandemic last night failed to reassure both citizens and the skittish markets.
It is natural to be concerned and have questions about what to do with your investments. We are here to help and to answer those questions.
Should I be selling? The short answer is no.
This volatility is short term. Your goals for your investments are long term. We have put your portfolio together with your timelines in mind. Over the course of the last year we have made an effort deliberately to reduce exposure to the risk assets, namely equities which has served well.
In our experience with these unusual and rare “black swan” events we need to keep in mind “this too will pass”. History shows that after an event like this, there is very good likelihood that a meaningful rebound shortly thereafter. Having been around for both Black Friday in October of 1987 and the financial crisis of 2008, the sun will come out again.
Not only are we glad that we have reduced risk assets to some degree but we are also happy that we have maintained positions in equities. The only way you can participate in an upside is by staying invested.
The chart above is the most recent example. Remember how bad it felt in November and December of 2018? It really sucked. The chart below shows through that period what the outcomes were if you panicked and went to cash at Christmas (worst case). Stayed fully invested (best case) and a couple of points in between.
We will be here and on station. Please call or let us know if you would like a call. We are here to talk about it.