“Yes, I’m aware of all the new expressions” the dog, named Tu, said with his latest look of indifference. You’ve heard them too…: “social distancing of at least 6 feet”; “we are alone together”; “we will come through this stronger and better”; but sigh, not having company or visiting people, or even travel along on a coffee run makes daily life a bit boring in some respects. But, at the same time, keeping those at risk close to home and safe is better for all AND my “parents” are actually playing with me more often, even if I don’t understand.
We here at White Raven Financial realize that the current pandemic is affecting or impacting everyone in a variety of ways. In our small office, we find Brett telecommuting from his home and Tu visiting the outside office door waiting for anyone. Our part-time employee, Kris, who lives/works from New Zealand, reports that New Zealand is under one of world’s strictest self-isolation rules and she now has a full house at home. Due to Kris, we are fortunate that all of our systems and operations were already set in place. This allows us to be a high-functioning, virtual team with the ability to provide the support you need. We transitioned from having most of our client meetings being held at the office to all our client meetings being held virtually.
As this new unseen virus takes hold across our country and the world, we find that it brings the prevailing trend of market volatility and uncertainty for the world’s economic future. FS Investments noted in their April 1st blog that in times of great uncertainty, it is not uncommon for companies to suspend or withdraw their guidance. FS Investments felt that there was too much uncertainty in the corporate credit outlook to provide a prediction about returns; that a combination of factors will eventually lure investors back to the market and reward those with a longer-term horizon. Franklin Templeton, in their Path to Recovery What’s Next blog, wrote that the monetary and fiscal policy that the government is supplying appears prompt, swift, and well designed. This provided support they thought could act as a bridge to set the stage for a robust rebound.
The Los Angeles Times reported, on April 1st, that economists who originally had followed the political lead are now forecasting more economic carnage as the projections of the coronavirus deaths soar. Jeffrey Kleintop, Charles Schwab Chief Global Investment Strategist, in his end-of-March blog wrote about the current global economic shock. He indicated that the world is already in a recession as a result of this shock. He continued by saying that the recession and current bear market ‘could be’ deeper but the corresponding duration may be shorter. The blog had a very nice illustration for the current recovery that China and South Korea are going through which we hope will transgress to the rest of the world.
One can talk about psychology, mindfulness, and meditation during time of stress but sometimes it just doesn’t work. When we look at our portfolios, we have this overwhelming sense of loss. We here at White Raven Financial empathize with you. Although we are professionals and are paid to be realist, it doesn’t mean we don’t understand your pain. It is our hope that you will reach out if you have questions or concerns because we are here for you. And to provide a bit of perspective to our lives, Set Your Egg Timer to 6 Months, written by Vitaliy Katsenelson, was sent by an Advisor Forum that we subscribe to. It reiterates that families and friends are the most important ‘thing’ in our lives.
We’ve heard several commentaries and politicians state that we are at war with an enemy that we cannot see. The major indices reacted in kind and backtracked trying to find solid ground to seize. Battered and pummeled, the blue-chip barometer (the Dow)* retreated -13.74% before holding the line for the month of March. The S&P 500 (SPY)* also received a pounding and withdrew -12.51% from the prior month of February. The tech-rich Nasdaq Composite (COMPTR)* appeared to be more strategic in its downfall thus receiving the least amount of damage by posting a -10.12% loss for the month. (*After linking, click on Quarterly had & Monthly Total Returns, “Monthly” tab.) On Tuesday, March 31st, the Dow Jones Indices released the latest S&P CoreLogic Case-Shiller report. The report did a repeat from the prior month and again noted that home prices are continuing to increase at a modest rate. The 20-city composite Home Price Index in January reported a 3.1% annual gain; a 0.3% gain from the previous month year-over-year posting. Before seasonal adjustments, month-over-month data had the month of January showing no gain over the prior month of December for the 20-city composite index.
Regards and thank you,
The Team at White Raven Financial
Advisory services offered through White Raven Financial Services, Inc. a Registered Investment Advisor in the State of Washington.
*Indexes are unmanaged and do not reflect service fees, commissions, or taxes. You cannot invest directly in an index. Past performance is not necessarily indicative of future results. Returns for the DOW, S&P 500 and the NASDAQ are the total return (price only) provided by Morningstar as of March 31, 2020. Diversification and asset allocation do not assure or guarantee better performance and cannot eliminate the risk of investment loss.
*The Standard and Poor’s 500 is an unmanaged, capitalization weighted benchmark that tracks broad-based changes in the U.S. stock market. This index of 500 common stocks is comprised of 400 industrial, 20 transportation, 40 utility, and 40 financial companies representing major U.S. industry sectors. The index is calculated on a total return basis with dividends reinvested and is not available for direct investment.
*The Dow Jones Industrial Average covers 30 blue chip U.S. companies selected by the editors of the Wall Street Journal. The Dow represents about 25% of the NYSE market capitalization and less than 2% of NYSE issues.
*The NASDAQ is a market-value weighted index that measures all NASDAQ domestic and foreign common stocks.