Markets Scared Sick

While fear and uncertainty have taken back the year-to-date gains for the major indices, they’ve also reopened a window for long term planning.

 

The markets are quick to react when a new event flips investor sentiment and distracts from the underlying fundamentals, but you shouldn’t lose sight of your long term goals.

 

Fear over the Coronavirus gripped investors as the major indices turned negative for the year. Uncertainty spread like the virus as new cases popped up in Italy, South Korea and Iran yet the growth of total number of active cases has subsided. The Center for Disease Control continues to warn that further spreading is likely but to what degree remains unknown.

 

However, our outlook on the U.S. Economy and economic growth has not changed. We started the year with solid economic data and so far, that has not been affected significantly. The U.S. Economy is resilient and can absorb shocks like these. We continue to expect around 2% growth in Q1 with possibly a small impact of around 0.2% off of Q1 GDP and maybe another similar reduction later in the year.

 

Market corrections like this are normal and relatively common. Fluctuations and dips are healthy and to be expected, markets don’t just go straight up. Volatility presents buying opportunities in our favorite sectors and regions. Investors will eventually forget their panic and refocus towards the underlying economic and market fundamentals that support future growth.

 

At Karp Capital Management, we build portfolios that take into consideration your investment objectives and tolerance for the market’s ups and downs.

 

If recent events have caused you to reassess your risk tolerance, we should have a discussion. Please follow the link below to complete our Investor Risk Assessment to get the conversation started.

 

On the other hand, our allocation to bonds and other fixed income strategies have soared as the flight to safety has driven fixed income yields to all-time lows. This opens up the opportunity to reassess your current financing strategies, save money and improve your cash flow by refinancing to lower rates.

 

Please complete the Loan Analysis Questionnaire to tell us about your current loan balances and the interest rates for each. We can turn this market correction into an opportunity to save you over the long-run.

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