Epidemic to Pandemic

It is hard to believe that just 1 month ago the markets were hitting all-time highs. Today, fear and volatility prevail as we are faced with the health and economic fallout of the unprecedented Coronavirus pandemic.

For all actively managed advisory accounts, we previously communicated that we have exited international equity (stock ETFs) and increased cash. Also, in a recent video, we discussed hitting risk off triggers in our technical analysis which now facilitates a shift out of equities, moving to fixed income and cash.

The signals from our rules-based investment approach are quite clear and look similar to what we saw in 2008 as the bear market commenced. While we expect markets to recover over time, we cannot know when or to the degree to which that will occur. Over time our technical signals will indicate when it is safe to take advantage of these remarkable lower prices, at which time we will begin moving back to our normal allocation. In the meantime, capital preservation is prudent.

Once implemented, clients in the income and conservative allocations could hold no equities in their portfolios. Clients in the growth and moderate allocation will continue to hold a small allocation to stocks. Portfolios with individual stocks have been moved to higher levels of cash but will still own some of the highest rated stocks

In a market like we are experiencing today, capital preservation is our primary goal. By limiting declines, we can help protect your long-term financial plans. We hope that you and your loved ones stay healthy and safe during this difficult time. Should you have any questions, please call your advisor.