My Investments: Seeing Beyond the Short-term View

Post Written by: Angela R. Berkosky, CFA

The last few weeks have been difficult for everyone. It feels like our world has been turned upside down on many levels. The spread of the COVID-19 virus has affected almost all aspects of our daily lives. School and retail closures, travel bans, empty grocery store shelves, “social distancing” — everything seems so surreal when you stop to think about it. We know everyone is focused on the health and well-being of their families, friends and loved ones at this time.

On top of all these anxieties, the last thing you want to be concerned about right now is ‘my investments’. However, we understand that in times like these it is difficult to remain confident while staying invested. So let’s talk about some of the dynamics going on right now in the market and economy, and what we can do together to stay focused on your long-term financial goals.

The equity markets have been on a roller coaster ride over the last few weeks, swinging by large margins on a day-to-day basis. Investors are unsure of the ramifications the new Coronavirus will have on the domestic and global economies. The ripple effect of shutting down travel, small businesses, and restaurants and retail establishments affects unemployment, demand, and overall consumer confidence. Will this throw our economy into a recession? Given the technical definition of a recession is two consecutive quarters of economic decline as reflected by GDP, it is possible we could see a recession in the coming months. However, if we can gain control over the spread of the virus and are able to re-open businesses, employ our workers, and begin spending again, we are hopeful this isn’t long-lived.

Our message to you, our valued clients, remains consistent: Do not allow your emotions to rule your thinking about ‘my investments’ in your investment portfolio or financial plan. Irrational decisions such as selling during downturns or exiting the capital markets completely can hinder long-term performance. We expect and plan for periods of market volatility when we develop portfolio allocations and financial plans.

The chart below shows the growth of the S&P 500 Index since 1980. Healthcare epidemics over the last 40 years are marked with red dots. This includes the HIV/AIDS epidemic in 1981, SARS in 2003, Ebola in 2014, and others. This chart shows us that not only have stocks recovered well after global health epidemics, but they’ve done so rather quickly. Once they have reached their bottom, equities have recovered to their prior highs within an average of 60 days. In other words, investors who remained invested per their long-term strategic allocation fared well in meeting their long-term goals.


my investments chart showing market changes after pandemicsWe will get through this period of uncertainty. This is a temporary setback, not a derailment of our financial future. We view the current situation as an opportunity to revisit your strategic portfolio allocation, take another look at your cash needs, make portfolio shifts to minimize tax liability, and review your long-term goals. We are here for you. We want to answer your questions and alleviate your concerns as you think about ‘my investments’.

As always, it is our pleasure to speak with you about your portfolio or financial plan. Please reach out to us if you have any questions about the market environment or your financial situation.

Graph and data source: Hartford Funds


Important Disclosure

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this article serves as the receipt of, or as a substitute for, personalized investment advice from Domani. A copy of Domani’s current written disclosure brochure discussing our advisory services and fees continues to remain available upon request.


Jennifer Hill25 years

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