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Private Brief – Coronavirus Stock Market Explained| 03/17/2020

Undoubtedly, you have heard recent news about the unprecedented actions being taken in response to the Coronavirus outbreak. 

Pence Wealth Management comes from years of experience in navigating confusing times of market turbulence. The market will rebound because this pandemic will only last within a 60 – 90 day period of time. Do not to become a victims of panic, which is another form of pandemic that will bring more loss than you need to experience.

We know the news headlines, market volatility and  government response to this pandemic can be unsettling.  So we want to share with you the key information that affects our decisions regarding our investment guidance.

  1. First. This virus is highly contagious but its mortality rate is relatively low and clearly confined primarily to the elderly, smokers, and people with compromised immune or respiratory systems.
  2. Second.  Eighty percent of coronavirus cases are mild and the recovery rate is about 14 days. Twenty percent of the coronavirus cases are severe and the recovery rate is about 21 to 40 days.  The total mortality rate is 3.7% – but 15% of it are those over 80 years of age.
  3. Third. In China where this started, peak outbreak was at about day 30 once this became a significant event.  By day 45, more people were getting better than were getting sick.  This means that the long term effects of the virus itself is relatively mild.
  4. Fourth.  This all means, that at this point the results of the outbreak and the response to it will probably run a 60 to 90-day cycle.  The whole world did not enter into this at the same time, so recovery sequences will vary.

From a portfolio management standpoint: We had maintained actions or taken actions to limit risk ahead of this and have continued to make minor adjustment during this volatile time; however, large wholesale exits to the market as a knee jerk reaction to what is an event of limited duration is not warranted.  We have navigated rough waters before and while we are not clairvoyant or perfect,  we will follow the best facts available and recognize that this difficulty is likely to be short-term and a return to stability will be ahead.

✴️  If anything, this is the time to add to your portfolio if you can because stocks are on sale.

Your investment time horizon is much longer than the period of this out break and reaction to it.  This is a bump in the road not a road block.

Please know that we are addressing these issues daily on your behalf.

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All Financial Consultants at Pence Wealth Management are Registered Representatives with, and securities and Advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA & SIPC. Financial Planning offered through Pence Wealth Management, a Registered Investment Advisor and separate entity from LPL Financial. The LPL Financial representative associated with this website may only discuss and/or transact securities business with residents of the following states: Alaska (AK), Alabama (AL), Arkansas (AR), Arizona (AZ), California (CA), Colorado (CO), Connecticut (CT), Delaware (DE), Florida (FL), Georgia (GA), Hawaii (HI), Idaho (ID), Illinois (IL), Kansas (KS), Kentucky (KY), Louisiana (LA), Massachusetts (MA), Michigan (MI), Minnesota (MN), Mississippi (MS), Missouri (MO), Montana (MT), Nebraska (NE), Nevada (NV),

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