Investment Update: Coronavirus Market Impact
With the recent unusual activity in the equity markets, caused by the spread of Coronavirus (COVID-19), we’d like to send you some assurance of our full attention on the issue, the plan already in place to protect your financial lifestyle and our strategies for uncertain future events.
Currently, the virus has impacted several countries, making this event an official “pandemic.” Mostly in Asia, the number of people diagnosed is relatively small as compared to other virus outbreaks, like influenza. What has the equity markets concerned, and making risk adjustments, is the uncertainty of the level of economic slow-down. One of the biggest concerns is the supply chain impact for companies working with Chinese suppliers, which can impact domestic companies of various sizes and sectors.
As you likely expect, our team has been monitoring this situation from the very beginning and has already made some moves to reduce risk in portfolios, specifically, a reduction in exposure to momentum stocks. Depending upon information coming in, we may make additional moves as warranted. However, the most important tactic to protect your wealth was done well in advance of this event when we built your portfolio strategy based on the combination of your need for and tolerance for risk. Your investment strategy was designed to withstand market volatility, like we are experiencing now, and not change your long-term financial goals.
While we appreciate the uniqueness of this market correction, we do understand and plan for such events. In fact, since 1950, the S&P 500 has experienced a correction (pull-back of at least 10%) every 1.89 years. Your team at Slaughter Associates has extensive experience in managing your investment strategy during these events and are prepared to make appropriate moves for you.