February 24, 2020
This morning equity markets around the world are markedly lower due to another increase in fear pertaining to the coronavirus. The Coronavirus epicenter was in Wuhan, China and is centered primarily in Asia. But this weekend there were reported cases of the virus in Italy that appears to have increased concern, and yes fear, which has led to a short-term decline.
In our firm’s view, this presents our clients with a significant buying opportunity. These type of short-term fear reactions have universally produced above-average returns as fear subsided. The Coronavirus will only have a defined lifetime and as we enter the spring, natural progress will be made in eradicating it. Please remember that short-term market downturns like this (or like the “fear” of yield curb inversion that we spoke about throughout December 2018) do not cause long-term economic damage. They merely cause short-term financial damage. The worst reaction in a case like this, just as we saw in December of 2018, would be to throw away superb intermediate and long-term investments in a failed attempt to prevent a little bit of short-term angst.
Our firm’s investment philosophy requires us to ignore short-term noise like the Coronavirus and only to hedge your assets in the event of an intermediate or longer-term issue. Please tune out the fear and embrace the opportunity! As always, our office is available to speak with you at (859) 223-6333 if you have any questions. We would like to take this time to ask you to follow us on our social media platforms (which are listed below) to get updates like this in real-time. We hope all of you have a great week!
C. Kelly Buckley, MBA, CFP®
Managing Director for Asset Management
*All client performance data is calculated by Morningstar, Inc. and reported net of all client costs. Morningstar, Inc. is an independent company that provides investment research and data validation. All performance results shown are net of Spectrum’s management fees, which vary from 0.9% – 1.50% per annum (as disclosed in Spectrum’s Form ADV Part 2). Fees may be negotiable based on many factors including potential referrals, relationship to a current Spectrum client, future likely additions to the account, etc. The performance results also reflect the reinvestment of any dividends, capital gains, other earnings, and the subtraction of applicable fees. Spectrum does not make any representation that client accounts will or are likely to achieve returns similar to those shown above. Clients and/or prospective clients should understand that PAST PERFORMANCE MAY NOT BE INDICATIVE OF FUTURE RESULTS. For additional information about Spectrum Financial Alliance, including fees and services, send us a request for our disclosure statement of Form ADV Part 2 or it can be found on our website free of charge at https://spectrumalliance.com/. Please read the disclosure statement carefully before you invest or send money.