Navigating Current Markets

Over the last couple of weeks we have seen dramatic volatility cause by COVID-19 and low oil prices.
On top of this, the rise of ETF’s and passive investments is causing indiscriminate selling because for many investors getting out means selling the whole index. In the last few years this has caused higher than normal growth in some areas of the market, but it has an inverse effect on the downside.

In this news letter you will find a few fund company commentaries, as well as some helpful data from CI on the benefits of not making knee jerk reactions at times like this.

In addition to these things, here are some things I want to communicate to you as a client.

  • Over the last couple of years we have been positioning clients for this.
    • The idea of a potential downturn has come up in most all of our conversations.
    • Now that we are in one, we are not panicking, or surprised.
  • Our portfolios are handling the downturn well
    • Our fund managers for the most part are loosing less as the markets decline.
  • Active management is a great advantage in a downturn
    • Fund  managers are able to take advantage of the swings in the market.
    • Most of our Equity managers had a good amount of cash coming into this, they will now be able to deploy it as they see fit.
    • We don’t have to worry about rushing into one sector or another, they are doing that for us.
  • Good companies are on sale again
    • We don’t know exactly where the bottom will be, but over the next while, the market is on sale.
    • Consider investing more over the next month or so. We do not know where the bottom is yet, but systematically investing through the downturn gives you the opportunity to get in while things are low.
  • Trust the management
    • Our fund managers have been here before. They have the ability to buy and sell stocks, hold on to cash, or do whatever they feel is necessary.
    • We have a big belief in finding high quality managers that have done well in down markets, now is the time to trust them and let them do what they are good at.
We will continue to keep everyone updated as we navigate these markets together.

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