March 25, 2020
Dear Clients,
Over the past few days, we have seen volatility that has impacted our world in many ways. It can be difficult to stay focused with the plethora of information in the 24/7 news cycle and the whirlwind of activity.
During times like these, it reminds us of a quote from Warren Buffett: “We know people will talk about this being an uncertain time… all time is uncertain. It was uncertain in 2007-09, September 2001, and it was uncertain on October 18th, 1987, you just didn't know it.”
We remain committed to assisting you and your family navigate these times with information and facts so you can maintain a perspective on where we have been and where we are headed.
Understandably, there are many recession conversations happening right now. One thing is important to remember when talking about recessions – they are part of the economic cycle.
There have been 11 economic recessions since World War II1. Defined by a fall in Gross Domestic Product (GDP) for two successive quarters, their impact and correlation to markets is relatively low.
The table below indicates returns for the S&P 500 prior, during, and after these economic events.
Past performance is no guarantee of future results. An investor cannot directly invest in an index. The returns include the reinvestment of dividends. Source: Morningstar Direct, using S&P 500 TR
Recessions are part of the market cycle, and each has been caused by different reasons, but each of them ultimately recovered.
We take anything that affects you and your investments seriously. We keep in mind, however, that market volatility and corrections are relatively common events.
We believe the objective is your financial security. We know risks are always present and we prepare for them in advance, not in reaction to volatility. As stewards of wealth, we consider risk tolerance, expected volatility and several mathematical tools in designing portfolios.
If you would like to talk or you need anything, we are always here to help.
Sincerely,
Jeffrey Furniss
CRN-3009435-032420
1 Sourced from National Bureau of Economic Research.