We are all living through an unbelievable moment in time. This (however you are defining “this”) certainly feels different. Thinking back to year-end 2019, what we are experiencing today really didn’t seem likely (or even possible) - yet this is the truth of how we begin this Friday.
You would have thought we totally lost our minds if we had sent out a memo at the end of last year saying over the next 10 weeks we expected:
o A pandemic virus will manifest in China, require quarantines of millions of people, within days spread around the globe and force lock downs of travel for whole countries.
o All gatherings of more than 50 people would jeopardize the containment of the virus
o Professional baseball, basketball, hockey leagues all suspend their seasons while college and high school programs cancel all their tournaments. Tickets to Broadway shows are to be refunded.
o Colleges, high schools and elementary schools will close their doors for at least two weeks or for the remainder of semester
o Students studying abroad will be ordered to pack up and go home
o People around the world will be encouraged to practice ‘social distancing’ to reduce the risk of infecting each other with the virus
o Interest rates globally are going to be pushed to record lows and in many countries government bond yields will drop below zero
o Talk of looming recession in the US, Europe, Japan and China will drive investors into a selling frenzy
o Oil price will drop 24% in one day
o The US stock market will experience days of record losses and gains in the same week with most of the day’s trading impact happening in the first 30 minutes and last 30 minutes of trading
o Political leadership will fail to offer meaningful and timely solutions to deal with the health crisis and stock market sell off
o Grocery stores will not be able to keep up with the demand for toilet paper, disinfectants, non-perishables, and frozen food
We feel and understand your anxiety, frustration, concern and feelings of being alone. We have not walked THIS path together before.
I think we are experiencing a crisis in confidence. When you aggregate our heightened concerns about our health, the political landscape, social issues and the economic impact on your net worth, it can be dispiriting.
Some of you may recall that I have done some mountain climbing. On the night we attempted our summit of Mount Rainier we woke at 11pm. With just a few hours’ sleep we dressed in the pitch darkness, ate some oatmeal, drank some coffee and by midnight we began our silent march up the mountain. There are 3 of us linked together on a rope line separated by 12 feet of sturdy rope which will hopefully be strong enough to support a climber that may slip into the many crevasses on the glacier. Carrying an ice axe and wearing heavy boots fitted with large crampons our full strides are about 6 inches in length. All we can hear from the other climbers is their heavy breathing and the deep cleansing breath of cold air you take every few minutes. It is dark, cold and lonely and your breathing is labored as you gain altitude. Above 11,000 feet we move steadily but very slowly in the dark.
In the stillness of the blackness around you, your inner voice is talking to you. At least my inner voice was speaking to me – and there were a couple of conversations happening at once. The first was around the topic of “what the hell were you thinking to agree to attempt this risky stunt” followed quickly by “this climb will NEVER end- I am moving so slowly that it will take years to make it to the top.” Who thought this was a good idea? There is little fun pushing yourself in windy and cold weather at very high altitude. I asked my inner self “can I really do this? Can I make it to the top? Can I make it back down to safety? “
We reached the summit at over 14,000 feet just as the sun began to appear. It was a mesmerizing moment of exhilaration. I did not expect the joy and emotion felt to be so powerful at that moment, especially when you consider that just 6 hours before I was thinking a successful summit was not humanly possible.
At the risk of pushing close to a spiritual boundary, I do think we need to have faith and confidence and hope that these last few weeks (and likely a few more weeks ahead) of walking up hill in the darkness will be rewarded with a worthwhile view from the summit. It is not easy to keep taking steps forward when you can’t see more than 6 feet in front of you. I encourage you to have confidence that staying on your path will end well in the long run in spite of the urge to change course and retreat.
Together we have climbed out of depressing economic conditions and market volatility. I see no reason our outcome will be different this time.
To replay my comments from last week’s email to you, the companies that make up the major indices are almost certainly not 10% or 20% (3/13 revision to now 20-30%) less valuable businesses today than they were last Monday. We believe real valuations should eventually drive markets to more rational levels. This is good news.
The bad news is that neither we nor anyone else can accurately forecast how long the panic attack is going to last. Historically, when black swan events strike and market prices react, the best plan has been to step away from anxiety motivated decision-making and remain patient. Pause to review your near-term and longer-term goals. Do you have enough cash/money market assets to get you through the next 18-24 months?
While we cannot accurately anticipate what will influence markets to cause a sharp market sell-off, we do know a recovery in prices does happen. We just can’t predict the timing.
Although the outside world feels like it is at a standstill perhaps, use this time connect with the people you care most about. Curl up with a good book, finish the TV series you have been putting off, start a jigsaw puzzle or experiment with new recipes. While we might feel alone during this time, we hope there is some comfort knowing that we are all in this together and we will come out of this together.
Please reach out if you have thoughts to share.
Matson Financial Advisors, Inc
Financial Planning * Employee Benefits * Wealth Management
4 Mountain View Terrace Suite 104
Danbury, CT 06810
Phone: 203-743-0131 x211
Annual income twenty pounds, annual expenditures nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds out and six, result misery. -Charles Dickens
One measure of leadership is the caliber of the people who choose to follow you. -Dennis Peer
Management is doing things right; leadership is doing the right things. -Peter Drucker
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