Investors have a lot to be happy about right now. The Dow Jones industrial just ended its best week since 1938. Since the March 23rd low, the Dow has gained a surprising 4,812 points. The recent rally in the stock market has a lot of people questioning whether or not we’ve hit the bottom.

A lot of you have asked how we should be proceeding. My answer has been the same across the board, “with caution.” As we enter the corporate earnings report season, I think investors should be prepared for more swings in the market.  On Friday, we raised cash in most of our portfolios by an average of 3% across the board.  We feel that large cash positions within your portfolios will play a critical role as we move deeper into the second quarter. Contact me if you need to discuss your portfolio & our investment philosophy.

Over the next few months, several critical milestones must be hit in order to see our economy pull in a long-term sustainable direction:

  1. Economic relief for small business owners must be received.  Two of the four critical loan programs sponsored through the SBA are providing forgivable loans for small businesses. We count ourselves lucky as COVID-19 has had relatively little impact in our day to day operations. The same cannot be said for thousands of other small businesses. I have friends and clients whose operations are completely shut down.  If you know someone who needs help, ask them to give us a call or visit
  2. The curve must be crushed, not flattened. COVID-19 must dissipate to safe levels. We can all do our part by social distancing & practicing healthy habits.
  3. America must get back to work. Unfortunately, this won’t be like flipping a switch. Parts of the US economy will go back to work before others. The same can be true for different geographic locations within the US. Areas hard hit by COVID-19 like New York & Louisiana may take more time to get back to work.

I want you to know that I share your disappointment with the market’s recent performance. It is important to maintain realistic expectations based on the market’s historical performance rather than the unprecedented returns of the recent bull market. Investors who have experienced a sustained market downturn know the value of maintaining a long-term approach and of staying invested even through times of market declines in order to benefit from market rebounds.

Looking back at the history of stock markets, a correction should be no surprise. If you stay in the market long enough, you will most likely see more. For long-term investors, these corrections can be an opportunity to make additional investments at reduced prices.

Despite the litany of bad news, there are reasons for optimism for today’s investors:

  • Economic and investment fundamentals remain sound.
  • Inflation concerns are minimal.
  • The United States continues to host the world’s most productive workforce with innovative companies leading the way.

What should you do now? Here are three areas I will be happy to review with you.

  • Make sure your portfolio is diversified. Markets change. Economic conditions change. No single investment approach will excel in every economic situation. While diversification doesn’t guarantee a profit or protect you from loss, it may be able to reduce the volatility of your portfolio.
  • Know your risk tolerance. Recent market volatility has served as a pointed reminder that investing involves risk. Your investments should be reviewed to make sure you are not taking on more risk than you want.
  • Remember your investment time horizon. Don’t let today’s headlines distract you from your goals. As long as your long-term objectives have not changed, you need not be unduly concerned about day-to-day fluctuations in the market.

Please call my office to set up an appointment for a thorough review of your investment program.