This month's newsletter will be a bit more abbreviated than normal, but I did want to put out some additional comments in light of the continuing market conditions. As already mentioned in my last market update two weeks ago, the markets have continued to be down hard on news surrounding the spread of the Coronavirus around the world. Unlike the market downturn of 2008, this current downturn has been sparked more by the unknown surrounding this illness rather than financial market problems. As markets are often an easy outlet for fear, selling has begun in earnest even as I write this. The upward climb in the market tends to be slow and steady over time. These downturns tend to be the opposite, and falls in the market are sharp and fast. With more than 25 years in this business, I have been around long enough to experience several significant downturns in the market. Major examples include the market downturn in the year 2000 when many of the tech companies fell from highly inflated prices, the six months of market turmoil from 2008, and the aftermath of the September 11 attacks on the World Trade Centre. In between these more significant pullbacks have been many other smaller downturns as well. A common theme in all of these experiences has been a detachment from rational analysis of company valuations replaced instead by a strong tendency to trade on emotion and fear at any price. Volatility also skyrockets and price changes from day to day can be dizzying. As advisors, we consistently recommend that clients resist the strong urge to sell into these volatile markets and instead wait out the storm until rational thought and behaviour returns. As scary as this virus is, this too will pass in time. The catalyst for market downturns is always something different as mentioned earlier, but human nature tends to be consistent and more predictable. Fear of this virus will likely continue to cause market volatility in the days and weeks ahead, but companies that you own in your portfolios will at some point be evaluated once again using rational thought and analysis once the clouds begin to lift. History has proven this out time and time again. Please reach out to us by phone or email if you would like to discuss anything. I have attached some more recent comments from RBC on this situation (see link below).
My family and I will be away over the March break to visit my sister in Tampa (back into the office on Monday, March 23rd). However, thanks to technology, I will have the ability to see emails, portfolios, markets etc while I am gone. Michelle and I will connect regularly to ensure that we respond to your concerns in as timely a manner as possible. Craig will also be off for a few days, but back into the office on Thursday, March 19th. Thanks everyone.
RBC Special report from March 10, 2020
As everyone is already aware, markets have been falling sharply and volatility is prevalent again. Here are some recent insights from our Global Portfolio Advisory Committee.
Vice of Volatility (press the back button to return to the blog)
Volunteering Day at the Sarnia & District Humane Society
Our Hazzard Wealth Management team joined another team from RBC Dominion Securities recently to offer some painting services to the Sarnia & District Humane Society. Not convinced that we were able to match the skills of professional painters, but the price was right and they certainly appreciated our willingness to donate our time. In addition to our painting skills, the RBC Foundation also made a donation of $1,000 to the cause as well.