We’re moved to check in with you today as it has come to our attention that some of you may have not heeded our long-standing advice and have been watching the mainstream news media (MSM). Specifically as it portends to the most recent outbreak of a strain of viruses known as coronaviruses, first discovered in 1960. These cause respiratory tract infections in humans that are typically mild – such as the common cold – but, rarely, are more serious as with MERS, SARS, and now COVID-19.
We at Rogan and Associates are your financial planners and have no professional knowledge of epidemiology. We are, however, students of history and particularly the history of recent headline-grabbing pandemics such as the 12 previous ones over the past 40 years. As you can see in the nearby blog entry from our friends at First Trust Advisors, history suggests the long-term impact on the success of your goal-focused personal financial plan should be minimal. No loss of life is trivial and we don’t take this topic lightly. We also don’t take lightly our responsibility to advise you to not let a temporary situation disrupt your long term financial plan.
A global slowdown in trade does seem to be occurring as China has temporarily shuttered manufacturing facilities in an attempt to contain the outbreak. Such disruptions have been temporary in the past. There may well be some economic effects as supply lines for manufacturers are disrupted while travel is curtailed. In the past, these issues have proven to be transitory. Importantly, unfulfilled demand in the near term tends to be made up in subsequent months and quarters.
While we can have no certainty when a vaccine will be developed, history suggests it will be soon. Reports are now circulating that at least one of the many companies working on a vaccine is preparing for human trials.
At Rogan and Associates we will never gamble with your money. Accordingly, trying to time trades based on short term declines (and when those declines will reverse) is simply not possible. As of this writing, the broad market averages have simply returned roughly to the prices they were two months ago!
Whether this “sale” continues or ends here is unknown to anyone. Historically, reversals are often sudden. If you have been thinking of adding to your portfolio, this may be a great time. Notably, money is pouring into bonds. The 10 year US Treasury note hit an all time low yield today. It certainly seems to be an opportunity to divest of bonds and if you have been considering refinancing your home mortgage, this may be a great time to do so.
Otherwise, be assured that your well-designed, well-diversified, goal-focused portfolio does not need to be adjusted for the effects of this latest “crisis”. If you would like to have an in person or phone conversation with one of the planners, please call today.
Then, as we always tell you, turn off the news, turn to your loved ones and enjoy the time your with them. We sincerely doubt that any of us will look back one day and say, if only I’d spent more time watching the “news”. – Michael Rogan