Good Monday morning (again)! Believe us, we’d rather NOT be sending market updates weekly, but things are moving quickly and we hope we can be a helpful voice in the midst of all of this. Our last two updates touched on coronavirus as its spread seemed to spark the market turbulence that is now entering its third week. Today, even as the market appears to be entering a new round of panic selling, we want to introduce a new “C” word as an alternative to the headlines currently dominating the airwaves and filling your inbox — Cheaper. Money is getting cheaper as interest rates fall. Oil is getting cheaper. Good companies are getting cheaper. It may not feel very good when it’s happening, but it’s what creates buying opportunities in the market.
Boy, would it be psychologically and emotionally helpful if healthy long-term investment returns were made up of an endless and consistent string of annual gains. In market reality—as in the rest of life, we’re afraid—the ride is a collection of good times (sometimes very good) and bad times (sometimes very bad). Taken together, the good times have historically outweighed the bad and so while we must deal with painful trips down every so often, it has paid handsomely to take the ride.
Recent times have been good. In fact, today marks the 11 th anniversary of the last bear market bottom on March 9, 2009. We’ve seen a remarkable run in asset prices since then and our portfolios have certainly seen the benefit of the good times. As that bull market aged, we proactively took steps to prepare for the next bear. We do have a game plan for this and as we mentioned in our update last week , we are cautiously shifting from defense to offense as investment assets get cheaper and buying opportunities emerge.
Finally, none of us wants to live with our head in the sand but do look for opportunities to take a break from the drumbeat of negative news this week. Encourage someone with a kind word and seek out the good, there’s still plenty of it out there. And a practical thing to consider is a potential refinance of your mortgage or other debt. With the recent dramatic fall in interest rates, you may have an opportunity to save some money there.
Please don’t hesitate to reach out if there are specific ways we can help. We’re confident there are plenty of good times ahead even as we currently endure this difficult and turbulent period in the market. Our long-term optimism is firmly intact as we envision the future for you and your investments.