You know how I said last week I had 31 pages of notes. This week I have even more, but the truth is you probably know most of what I have in front of me. The media is doing a great job disseminating information, some might argue too good a job.
The markets have reacted as one would expect. But I continue to stand by my original thoughts from several weeks ago. The first case of coronavirus in China was reported mid-December, and it appears the number of cases there are now on the decline. So, figure it took three months from the start of the spread to its culmination this week. Seeing as we are only now starting to experience the ramp up in the United States, I would expect to see the number of cases in the U.S. grow meaningfully through at least May. We would urge you to take precautions where possible, wash your hands often, self-quarantine if exposed, and help the most vulnerable.
As for the markets, I have this to say. The news was pretty scary this week. Social gatherings were canceled, the stock market fell, and people stocked up on necessities. It makes sense to feel anxious. And where there’s anxiety, there is tunnel vision: It’s easy to focus in on the threats, on what’s going on right now. And that can lead to short-term decision making that we might later regret. Last week, we placed some initial trades to take advantage of the market volatility and selloff. This week, we went further in adding positions to some accounts and taking further gains. Warren Buffet is often quoted as saying, “be fearful when others are greedy and greedy only when others are fearful.” He’s also quoted as saying, “Every decade or so, dark clouds fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons.” We view these current events as the downpour. In time, the decisions we make today will pay off in the years ahead.
Harvest Financial Advisors is doing what we’ve always worked to do during uncertain markets:
- Keeping your goals on track
- Balancing your risk level with how long you’re planning to invest
- Actively managing your cashflows
- Rebalancing your accounts on a scheduled basis
- Looking for ways to save taxes
- Keeping costs low
Bruce J. Mason, MBA