First Quarter 2020 Newsletter
As February began, markets were reaching all-time highs and most of us investors were at most keeping one eye on the coronavirus spreading primarily in China. The rest of the outbreaks were quite isolated throughout other parts of the world. The general consensus was the illness would be contained to China and, “Not a big deal” for the U.S.
However, the illness, as we now know, spread to upwards of 60 different countries and possibly moving towards a pandemic. Fear began to grow and markets never like uncertainty. The good news: new cases appear to have considerable slowed in China as of March 1, 2020 according to (https://www.worldometer.info/coronavirus/worldometer ) which combines data from global health organizations.
Perspective: Coronavirus and past epidemics
Are investors overreacting? Is the public overreacting? As a comparison, the flu has infected between 32 million and 45 million Americans in this flu season alone, according to the Center of Disease Control. There have been nearly 500,000 hospitalizations and tragically between 18,000 and 46,000 deaths related to the flu. Yet our daily routines go uninterrupted. As of March 1 there have been about 90 Americans who have contracted the coronavirus. While we don’t know if this will eventually turn into a significant health crisis, we have lived through epidemics in the past (i.e. SARS, MERS and H1N1). During the H1N1 pandemic of 2009, according to the World Health Organization, there were approximately 60 million cases, 275,000 hospitalizations, and 12,400 deaths in the U.S. between 4/12/09 and 4/10/10. In 2009, the media may have been more focused on a new President and the Great Recession, limiting the hysteria.
“The only thing to fear, is fear itself” – F.D.R 1933
As we enter March, the economy is on strong footing and the banking system is in much better shape than 2008. That said, we know that volatility in the markets is inevitable. Stocks seem to take the stairs on the way up, and the elevator on the way down. This bout of volatility will end, but trying to call a “bottom” is futile.
I recognize these days can be trying, not simply from the vantage point of the investment community. No one likes uncertainty, especially as it relates to our health and our loved one’s health. Uncertainty drains our most precious resource: JOY. So, let’s all turn off the news, get outside (particularly if in the south) and enjoy the weather as we turn towards Spring. I am confident that this too shall pass and we will be better for it.
**Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. No strategy assures success or protects against loss. Investing involves risk including loss of principal.**
The second photo is at the finish line, exhausted yet pleased to be finished. Every other marathon I have finished, just as this one, I have said that will be my last. We will see.