March 12, 2020 – Marc and Marion share a letter sent to Freedman Financial Clients
Last night the President announced that the administration is taking forceful steps to contain the Coronavirus (COVID-19) and protect our citizens. Businesses, schools, non-profits and entertainment venues have also established guidelines that encourage social distancing, working from home, and keeping the health and well-being of citizens safe. This is unlike anything we’ve experienced in our lifetime; however, we are encouraged by these unprecedented efforts. We believe that while the short-term spread of COVID-19 is likely, there is also strong confidence that it will be more rapidly contained with these preventative measures.
Intuitively, I think we all know this, but when it comes to curtailing our normal activities, fears of falling ill, and concerns about money, it’s hard to remain unemotional.
Drops in account values, like the ones we’ve seen over the past couple weeks, are tough to stomach – especially when just a few months earlier we were celebrating all-time highs. For several years, we’ve suggested that portfolios have grown faster than anticipated and that a pull-back was looming. That pull-back is now here, though admittedly we never imagined it would be so quick and so sharp. As we’ve seen with past volatility, markets tend to overreact both on the upside and the downside. We think we’re seeing the latter right now. When times are uncertain, the stock market reacts with the temper of a newborn. It raises our heart rate and tests our sanity. Today we’re in the midst of a cranky phase; and we’ll get through it.
For now, we wait for a signal that the virus is under control, and that the number of cases begin to drop. That may take a while, but considering the drastic measures taken by our government, businesses, and schools, it should shorten the timetable.
We fully expect a swift rebound to both economic activity and portfolio values once a sense of order is restored. This is not a time for panic, but a time for patience. We encourage you to use this opportunity to enjoy your family. Communicate more. Share stories, cook a meal together, or engage in a game night.
Managing your financial expectations is of utmost importance to your personal well-being. We will continue to remain a voice of reason in a sea of chaos. While the impact of the coronavirus is unchartered territory for us all, at Freedman Financial we feel that we’ve been through these ups and downs before.
Our experience suggests that patience is rewarded. We’ll continue to guide you through this treacherous terrain and help you arrive safely on the other side.
Marc & Marion
Back to Blog