We hope this letter finds you and your family safe and well. Here at Farrell Wealth Management, our job is to find financial solutions for you and our other clients. But we also care about your personal wellbeing – especially now, given the pandemic. So, we hope you are healthy, and that you can find pleasure in being with your family during these stressful times.
Under normal circumstances, our team strives to reduce your stress as much as possible – at least as it pertains to your money. But these aren’t normal circumstances. Many, if not most of our clients are currently sheltering at home, worrying about how the virus will impact their lives and their finances. That’s why we’re sending this letter. We want you to know we are doing everything we can to keep you on course to achieving your long-term goals.
Given the demands of social distancing, and the never-ending barrage of virus-related headlines, it may seem like your long-term goals are moving further away instead of closer. Lately, many clients have told us how slowly time seems to be moving. Despite that, spring is now here, and the first quarter of 2020 is drawing to a close. That means your quarterly statement will soon arrive.
As you know, we have just been through one of the swiftest and most sudden bear markets on record. As a result, almost every investor experienced setbacks during March, including those with relatively conservative portfolios. To be candid, it will probably sting when you see how your investments performed over the past month or so. It may well add to your stress, which is obviously not what we want. It may prompt you to worry more about what the future holds.
With this in mind, there are two things we want you to know.
First is that we understand. For the last few weeks, we’ve spent our days on the phone talking with our clients, answering their questions, hearing their concerns, acknowledging their fears. You are not alone in what you’re feeling. Our other clients feel it. Moreover, we feel it, too.
Second, and most importantly, we want to assure you that the numbers you’re seeing, and the feelings you’re experiencing, are temporary. You are invested in strong companies, most of which have withstood the test of time and will play an important role in our country’s recovery when it happens. (And make no mistake, it will happen.) While the coronavirus has knocked our short-term results down, it has not changed our long-term outlook. It has not knocked you off course to reach your financial goals.
Bear markets, and yes, pandemics, are temporary, too. In fact, history has shown that the markets tend to recover very quickly after pandemics.1 Take a look at this chart:
EPIDEMIC // MONTH END // 6-MONTH % // 12-MONTH %
........................................CHANGE OF S&P // CHANGE OF S&P
SARS // April 2003 // 14.59 // 20.76
Avian flu // June 2006 // 11.66 // 18.36
Swine flu // April 2009 // 18.72 // 35.96
Cholera // November 2010 // 13.95 // 5.63
MERS // May 2013 // 10.74 // 17.96
Ebola // March 2014 // 5.34 // 10.44
Measles/Rubeola // Dec 2014 // 0.20 // -0.73
Zika // January 2016 // 12.03 // 17.45
It’s true this particular pandemic is unlike anything any of us have ever experienced, and there’s no way to know when it will end. But it will end. There’s no doubt about that. We want to take advantage of the rebound when it inevitably occurs, and we feel you are currently set up to do just that.
So, here is our advice. When you get your statement, take a deep breath. Re-read this message again, if it helps. Remember that we invest for your long-term future, not for a specific week, month, or quarter. Remember that our team has been helping clients get through bear markets for over twenty seven years, and that we will help you get through this one. Then, go outside for a walk. Do something with your family. Even during a historic time like this – especially during a time like this – that is what’s important.
Of course, if you have any questions or concerns about your statement, please don’t hesitate to let us know. That’s what we’re here for. In the meantime, we’ll keep monitoring the markets so you don’t have to. We’ll leave no stone unturned in our efforts to keep you on course to your goals and dreams.
We’ll keep being there for you in every way we can.
In the meantime, please stay safe! As always, thank you for the trust you have placed in us. Let us know if there are any additional ways we can be of service.
March 2020
1 “How the stock market has performed during past viral outbreaks,” MarketWatch, https://www.marketwatch.com/story/hereshow-the-stock-market-has-performed-during-past-viral-outbreaks-as-chinas-coronavirus-spreads-2020-01-22
