What you need to know about Coronavirus and the markets

By now, you are already seeing the effects of the Coronavirus on the global economy and financial markets. So many industries have already been affected and many more are sure to be impacted in the months to come.

In times of uncertainty, the best we can do is focus on the things we can control. It is important that we have a plan in place and stay the course. To help you successfully navigate the recent changes in the market, I have outlined my thoughts below.

Stay the course - I believe the Coronavirus outbreak will peak in late May or June followed by a strong economic recovery. This is a view shared my many health and financial experts. Although stocks might not return to previous market high, I believe that stock market will recover from current lows and exit bear market territory by the end of the year.

Help is on the way - I expect Congress, the Federal Reserve, and Central Banks around the world to work together to ease financial conditions. Their actions are needed to provide aid to the industries effected and minimize supply chain disruptions.

Maintain a long-term focus - In this environment, I believe a combination of defensive investing and prudent cash management strategies will allow us to take advantage of opportunities when they arise. Stocks are currently on sale. I am actively looking for investments that will yield attractive long-term returns.

Cash is still king - I favor companies with strong cash position and healthy cash flows such as financials and US housing related investments. At this time, we are adjusting our portfolios to limit the exposure to the international markets while under-weighting vulnerable sectors such as retail, travel, and gaming.

Lastly, market volatility is not new. Over the past few years, we have weathered a number of negative events and still posted double digit return. If we can successfully navigate the European Debt Crisis, multiple Brexit Votes, the fall of crude oil prices, government shutdowns, and the US – China trade war we can get through this. 

If you have experienced changes in your employment situation, health, or have general questions, we are here to help.