posted by: Radnor Financial Advisors
The past several days have seen continued volatility in equity markets, with each day seeing big movements, ending the bull market (which technically never achieved its 11th anniversary). Markets are anticipating the spreading coronavirus and the expected decline in economic activity as communities around the world undertake social distancing measures and quarantines.
We recognize the uncertain health and economic environment is highly unnerving. As Warren Buffet recently stated, “This is a terrible event that’s occurring, we don’t know how terrible. It may not turn out to be that big a deal when we get through, but it may turn out to be a very big deal, and we just don’t know.”
The fact that we just don’t know is what makes everyone anxious. The worst of the economic slowdown is still to come over the next few weeks and could lead to a recession. In reaction to the evolving climate, central banks around the globe have taken accommodative action, including the US Federal Reserve cutting is benchmark Fed Funds rate to 0.00% – 0.25% and increasing its balance sheet by initiating a $700 billion bond buying program.
Despite the uncertain short-term environment, we remain confident in the resiliency of the markets longer-term. As such, we encourage investors to stay the course. Making emotional investment changes in turbulent times is rarely a good strategy.
If you have any family, friends, or colleagues that may be feeling uncertain during this time and would appreciate an objective conversation to provide comfort and help maintain a steady view, we are always available to talk.