“In the business world, the rearview mirror is always clearer than the windshield.”
--Warren Buffett
Our everyday lives have changed dramatically over the last few weeks as everyone works together to minimize the impact of the novel coronavirus. Despite the uncertainty of what may come, it is encouraging to see everyone working together to stay healthy and help those that need it the most. I am grateful to those of you who have shared your positive outlooks and how you are working through the “new (and hopefully temporary) normal.”
As we do not know what the coming weeks will bring, it seems that the efforts of the government, health care workers and our fellow citizens are having a solid impact on flattening the curve of the virus. This is encouraging as the sooner it passes the sooner we can get back to the “old” normal that we like much better.
The road ahead will be bumpy and volatile as we move into uncharted waters. As businesses and day-to-day life has slowed down for the time being, we will not understand what economic impact these changes will have until later this year. During these times of change and heightened volatility it is important for us as long-term investors to maintain a clear vision of our financial goals and the plan to get there.
It is never comfortable to watch the value of our savings and investments decline by a significant amount. With that said, investors who panic and sell when markets are falling lock in their losses. Those who remain invested may have opportunities to regain lost value when the market recovers, as it has many times before. There will also be opportunities as the market rebounds. As Warren Buffett says: “Be fearful when others are greedy and greedy only when others are fearful.” This is a very fitting and relevant quote in these times.
It is likely we may see an economic rebound later this year and into 2021 as the outbreak is contained, businesses reopen, and fiscal and monetary policy support expands. The US economy and corporate America have steered their way through world wars and cold wars, financial crises, and geopolitical events. Through even the most challenging times, markets have found their way back to normalcy, and investors have been able to look to the future. There’s no reason to believe this time will be different.
Trust your plan, be well. Please do contact me if you have any questions or concerns or if I can help you in any way.