Here is how we are approaching portfolio management in this environment:
We believe sell-offs create opportunities for disciplined long-term investors.
- We start with well-diversified portfolios.
- We rebalance the portfolios regularly to lock in relative performance (buying low and selling high).
- We look for tactical opportunities created by any pricing dislocations.
We encourage investors not to see this as an opportunity to reduce risk.
- Reducing risk after a market decline locks in the decline and will result in missing out on the inevitable rebound. This is market timing, which rarely pays off.
We believe the future cannot be predicted, only prepared for.
- It is possible that the combination of the oil price war and Coronavirus sends the U.S. into a technical recession, particularly if we start to see major cities begin to restrict activities.
- It is also possible that in a month, investors will begin to see past the peak impact of the virus epidemic and equity markets begin to rally as fast or faster than they fell.
- Either way, we are prepared to take advantage of what the market has to offer. Two weeks ago in our report, Panic or Profit, we talked about the importance of staying calm in the face of market volatility. In the piece we provided some perspective by showing how the recent moves look compared to history. We update the chart below. While the moves feel dramatic, they are a minor blip on the history of the S&P 500.
Amidst the volatility, we are welcoming conversations with our clients and encourage you to set up a call by contacting our office at 315-724-1776. As always, thank you for your continued partnership.
Founded in 1979, Strategic is a leading investment and wealth management firm managing and advising on client assets of over $1.8 billion.Overview
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