Well, the historic volatility continued last week. On Monday march 23rd, the stock market hit at least a temporary bottom which was then met by a strong bounce higher that lasted for three days. At this point it is unknowable if that was THE bottom of this market decline or a temporary bottom. This bounce was likely helped by the Federal Reserve which took steps at record speed to provide liquidity to the bond market by purchasing treasury and mortgage bonds1 that in 10 days basically matched the actions that during the 2008 and 2009 crises took almost a year to achieve2. Additionally, on late Friday the anticipated record $2 Trillion stimulus bill was signed. Both of these measure should help in the short run, however the longer term impacts of all of this stimulus is yet to be determined. Getting through the “shutdown” caused by the virus is still the top priority.
On Tuesday March 31st we close out the most volatile month for the markets in our lifetime. For those of you brave enough to look at your statements, keep in mind that the last four weeks were the fastest 30%+ decline in history and while I think we have held up fairly well given the backdrop, meaningful declines have taken place for most everyone invested in markets around the globe. Upon closer examination you will see that the investment allocation for our portfolio strategies look quite differently than it did at the end of February. This is a result of making a number of changes that I’ve been alluding to in my updates during the last few weeks to either de-risk or to add investments where I prefer the risk/reward trade off, given the high levels of uncertainty.
With respect to our portfolio strategies, we will continue to slowly add to investments that we think provide us with good risk/reward characteristics. My thinking is to be on the cautious side for now. We’re following the technical indicators you’re all aware that I use to see when they can once again begin to provide helpful investing insights. In closing, please stay safe, most of our team is at the office every day and taking the necessary precautions. Let’s hope that the month of April marks a turning point for the better in this historic time.
Kind regards,
Edwin and George
1 “Federal Reserve announces extensive new measures to support the economy.” www.federalreserve.gov. 3/23/2020.
2 “The Fed is providing way more help for the markets now than it did during the financial crisis.” www.cnbc.com. Jeff Cox. 3/24/2020.
3 “This was the fastest 30% sell-off ever, exceeding the pace of declines during the Great Depression.” www.cnbc.com. Yun Li. 3/23/2020.
Waingart Wealth Advisors of Janney Montgomery Scott
403 Roper Creek Drive, Greenville, SC 29615
864.438.3817 | ewaingart@janney.com
