| March 2020 As mentioned in a recent note by Rob Carrick in The Globe and Mail: “Let’s look at some things you can do to limit financial stress. One is to stop endlessly checking what the stock markets are doing. A rapidly plunging market sends a message of crisis. Spare yourself. Check in once a day or less, and remember what has happened in previous stock market declines. Stocks find a bottom and then rally. The market does not go to zero. It bends, but never breaks.” Finding your zen as financial markets burn, March 12, 2020 – The Globe and Mail These past few weeks have been far from ordinary. Portfolios have retreated at startling speed from recent highs and we understand how this may make you feel. With a surge of volatility, the global stock markets are back at the center of attention as reaction to COVID-19 begins to chip away at daily life. Many events are being cancelled or delayed, sports seasons are being suspended and travel to Europe is taking an early spring break. This is a textbook event-driven bear market that has come about on a heels of two black swan events which we touched on in our past updates. Anxiety levels are high, and news sentiment is incredibly negative. An interesting note in the markets Thursday was that stocks, bonds, gold and even bitcoin all dropped in value – a correlation that helps illustrate the indiscriminate selling that has plagued the markets recently. Emotions are running hot. We pride ourselves on a disciplined approach to investment and have a process for events such as we’re experiencing. By taking the emotion out of our investing, we analyze the underlying fundamentals of the economy and the businesses we own. We diversify across multiple asset classes and use alternatives to help mitigate volatility and find uncorrelated sources of return. While we do not have a crystal ball and unfortunately cannot tell you what may happen tomorrow, we know with the information that we do have that there is light at the end of the tunnel. Below is a link to an article from Scott Mackillop that reviews this current turbulence in the context of the previous bull and bear markets. A great read in its entirety, but if you don’t have time right now here are a few of the main points: “An investor’s behavior is the most important factor in determining success. Here’s why. You can be invested in the most perfect portfolio, but if you abandon the strategy before it has a chance to work for you, you won’t be a successful investor. Most people abandon their strategy for one of two reasons. Either they lose heart because of declines or volatility in the market, or they become fearful based on world events. Neither of these reasons justifies abandoning an otherwise sound investment strategy. How will you deal with the inevitable ups and downs of the markets and the constant stream of negative news? The answer to this question will determine your success as an investor. The sheer force of 7.8 billion people trying to improve their lives will ultimately push markets higher. It will not be a smooth journey, but if you are patient and disciplined, it can be a rewarding one. You hold the key to your success as an investor.”
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Business Continuity at Richardson GMP
Update: Annual Reviews will be completed by phone until the COVID-19 situation has subsided. There is currently a great deal of public focus on the business disruption related to COVID-19. We continue to monitor the situation carefully to ensure there is minimal disruption to our operations and that we are here to continue to support your wealth-planning needs. Rest assured that it is business as usual at Richardson GMP. We have the infrastructure in place to be able to work from home as needed should conditions in Vancouver change.
Our team continues to work diligently to support your financial well-being for the long term. That includes monitoring market activity to effectively manage risk in your portfolio. As always, we are available to answer your questions and address your concerns by phone, email or in person. We will be in contact with additional information if there are any meaningful developments for our workplace or the situation materially changes.
Spring Break
Update: BC’s Chief Medical Officer has advised that people who are returning from travel outside of Canada are required to self-isolate for 14 days upon return. For those embarking on spring break adventures, we would recommend that you review the travel warnings for the parts of the world you’re voyaging to. Many schools and workplaces are instituting policies for coming back from travel and we are currently in a highly fluid situation that is likely to change a few times in the coming weeks.
Stay healthy out there and wash your hands regularly!
Useful Links:
https://www.canada.ca/en/public-health/services/diseases/2019-novel-coronavirus-infection.html http://www.vch.ca/about-us/news/vancouver-coastal-health-statement-on-coronavirus http://www.bccdc.ca/health-info/diseases-conditions/coronavirus-(novel)
Chernick & Associates Wealth Management Group Richardson GMP Limited
Guinness Tower
1055 West Hastings Street, Suite 2200 Vancouver, BC V6E 2E9 Tel.: 604.640.0400 Toll Free: 1.866.640.0400 www.ChernickandAssociates.ca |