Market Update 3/12

Well, it was another wild day in the markets.  Fear over the corona virus continues to grow.  We know this can be disconcerting—both in worrying about your personal health and your portfolio.

As the U.S. moves further toward a “stay home economy” for the coming months, analysts are scrambling to guess what this means for the U.S. economy.  In the absence of hard data, the markets are giving over to fear and discounting the worst case scenario.

One of our principles at Archetype is “Evidence, Not Opinion”.  At this point, there is not enough evidence to show that the U.S. economy will enter a recession.  In fact, just this morning, some new, very strong employment numbers were released.  Therefore, we are recommending our clients stand pat at this time.  We understand that sometimes the hardest thing to do is to do nothing.  However, sometimes the hardest thing to do is also the BEST thing to do at a given moment!

It is important to realize that this kind of market volatility is not new.  On average, over the last 90 years, there has been a 20% + sell-off in every 2.5 years ^[1].  Those bear markets generally only lasted about six months.

Rest assured, we are watching the data very closely.  We have a game plan in place to make moves based on our Three Dials investment philosophy.  For now, try and tune out the media hype as much as possible, stay healthy and have courage.  We will keep you posted.  Thanks for your trust.

Source: 

[1] https://www.ftportfolios.com/Common/ContentFileLoader.aspx?ContentGUID=ed114bca-4416-4caf-a2ea-97bf515b11d7