Hope everyone is doing well. I wanted to provide a short update on the market. Coming into this pullback, the economic fundamentals in the US looked quite good. Just last Friday on March 6th, it was reported that the US added over 250,000 jobs in the month of February. Additionally, a number of other economic indicators such as manufacturing activity and profitability were off to a strong start, signaling what could be a good year.
However, as we all know, the last 2 weeks have had a very abrupt and volatile stock market pullback. First, due to the possible reduced economic activity from the corona virus and now over the weekend, the sharp decline in the price of oil and the likely negative impact on that industry. This is the fastest 10% pullback in history, on the way to almost 20% yesterday. Computerized trading and leverage can make markets move much faster than ever and certainly faster than the facts on the ground support. It’s hard not to think that this is an overreaction and that markets will recover later in the year. That said markets can always move further than it appears they should.
So far our portfolio strategies have held up relatively well, keep in mind though when markets sell off indiscriminately, most investments participate to the downside. At this point, in most market pullbacks, we feel it is generally the wrong time to sell equity/stock positions and reduce risk. Rather, in the coming weeks, we can reassess to see if the fundamentals support reducing risk or adding to risk. Know that I am monitoring things closely and will take action as it makes sense for the according portfolio strategies.
Kind regards,
Edwin and George
Waingart Wealth Advisors of Janney Montgomery Scott
403 Roper Creek Drive, Greenville, SC 29615
864.438.3817 | ewaingart@janney.com
