In my last market note I left you with the adage, “Keep calm and carry on”. A couple of weeks later this advice is still valid but it does seem harder to manage.
The markets are anything but calm and we have entered a bear market. A recession is most probably soon to follow. Recessions happen. Usually they are the result of some significant economic excesses such as real estate in 2008 and technology spending in 2001. The recessions ended when the excesses were corrected, processes that were often long and painful. This situation is different. COVID-19 has shocked the global economic system. The virus and the societal response will have deep economic implications especially for certain industries like travel, entertainment and other consumer spending. But viruses run their course. When this happens, the economy should respond.
But right now, there is no clarity about how long the pandemic will last and the markets are having a difficult time assessing the short- and long-term economic effects. There will be a point at which things become clearer and volatility lessens. We will come out on the other side with pent up demand and a collective desire to move forward.
In the meanwhile, the most important thing we can do is protect our health and that of our friends and families by following recommendations for social distancing and sanitation. We will be doing our part by closing our physical office as of today. We plan and test for just such an event several times each year. Please know that we are still available, and you can reach us at our normal email addresses and phone numbers. Do not hesitate to call or write.
So one more quote:
“We are more often frightened than hurt; and we suffer more from imagination than from reality.” — Seneca