Market VolatilitySubmitted by Marshall Financial Group on March 13th, 2020
March 13, 2020
A message from Marshall Financial Group
At Marshall Financial Group we are working diligently to help our clients navigate through this extreme level of market volatility. We understand that many of you are concerned regarding your investments and the long term impact on the achievement of the goals that are so important to you. We want to acknowledge your concern and assure you that we take our responsibility to you and your family very seriously.
We would like to review some facts and try to put the current situation into historical context. Yesterday the World Health Organization upgraded the current outbreak of coronavirus to a global pandemic. President Trump spoke to the nation last night and outlined steps that the United States is taking in light of this outbreak.
The major way to address any outbreak of this type is by containment to the extent possible. This includes travel bans, school closings, telecommuting where possible, and overall social distancing. These activities naturally lead to a decrease in economic activity and therefore an impact on the economy. We do not have a crystal ball to predict this impact, however, we have historical events to lend perspective and provide insight into long term implications.
We regularly monitor economic indicators that have historically been used to predict economic expansions, slow downs, and potential recessions. Leading into this biological crisis, these indicators reflected that the economy was solid. The volatility we are currently seeing in the markets was triggered initially by an unforeseen biological event. Although we anticipate that the reduction in economic activity caused by containment practices will in fact have an impact on the economy, we also believe that this impact will be relatively short in duration. The necessity of implementing these practices, when taken in perspective, represent an exercise that is important for the overall health of each member of our society.
As we monitor investments, we are mindful that changes to portfolios during extreme volatility should be implemented very cautiously. We are reminded that overall investment strategy is based on the concept to buy low and sell high. This is easy to say in an expansionary market. It takes investor discipline to remain dedicated to this guiding philosophy in challenging markets. As your financial professionals, we are here to help you navigate this market in a way that is committed to your long term success.
We are fortunate to live in the greatest nation in the world. Throughout history we have faced challenges far greater than the situation we are in today. We encourage you to remain confident in our economic system and its ability to weather this biologically initiated event.