Market Update

It’s been a little while since we updated you on the state of the markets.

COVID-19 surely caused the global markets to plunge back in March. It was relatively short-lived, and the market bottomed on March 23rd. Since then, markets have rebounded quite nicely already (about 50% up from the bottom) overall. The markets are driven by emotions, and uncertainty brings those emotions high, and causes reactions in either direction. This is what we call volatility – the ups and downs of the stock market.

There is no doubt that some sectors were hard hit. With travel at a standstill and retail outlets forced to close their physical doors (unless they already had a good e-commerce platform), many of these stocks plunged.

There were some sectors however, that performed extremely well as others declined. Many tech stocks surged, and consumer staples stocks like grocery stores, for example. There is always opportunity in seemingly dark times. This is what our portfolio managers do for us. They re-evaluate the stocks and bonds they own, and buy and sell during these uncertain times. By doing so, many were able to capture the upswing in stock values, and thus, create returns for us as investors.

While we have just seen another small correction last week, we’ve seen a bounce back again this week. The volatility (remember, that means ups and downs) continues.

Investors (at least our clients) who are patient, and have the appropriate balance of investments for their age, risk tolerance and time horizon goal (when do you need the money?), will come out of this pandemic-driven market downturn, hopefully quite content with how their portfolios have endured. Our world is not over, as far as being an investor is concerned. It is different, and we will adapt to life in these new times. Those who continue to follow their plan with a disciplined approach, and patient view of the markets, should succeed.