posted on March 13th 2020 in Market Commentary with 0 Comments /

You’ve seen the news and we have, too. In fact, we have a careful eye on everything going down – and up. We’ve been hearing from many of you about your concerns. 

The market is clearly responding to new information as it becomes known, but the market is pricing in unknowns, too. As risk increases during a time of heightened uncertainty, so do the returns investors demand for bearing that risk, which pushes prices lower. Investing is based on the principle that prices are set to deliver positive future expected returns for holding investment assets.

We can’t tell you when things will turn or by how much, but our expectation is that bearing today’s risk will be compensated with positive expected returns. That’s been a lesson of past health crises, such as the Ebola and swine-flu outbreaks earlier this century, and of market disruptions, such as the global financial crisis of 2008-2009. Additionally, history has shown no reliable way to identify a market peak or bottom. These beliefs argue against making market moves based on fear or speculation, even as difficult and traumatic events transpire.

Let’s stay focused. What does focus look like? It’s about the long-range perspective. Volatility is a historical element of the market. But when we zoom out, we see a reminder of why we stay the course.

about the author: WorthPointe Wealth Management

Continue Reading

Other articles filed under Market Commentary

Some Rational Thoughts

March 13, 2020 - You've seen the news and we have, too. In fact, we have a careful eye on everything going down - and up. We've been hearing from many of you about your concerns.  The market is clearly responding to new information...
Continue Reading

What You Need to Know about the SECURE Act

February 17, 2020 - The SECURE (Setting Every Community Up for Retirement Enhancement) Act became law during the last few weeks of 2019 and became effective on January 1. This measure, which affects anyone who has an IRA, includes the following significant changes: RMDs...
Continue Reading

VFO Hub offers access to best-in-class tax specialists

October 21, 2019 - What does it take to be able to help clients gain financial peace of mind? To me, it requires a great team of Certified Financial Planner™ professionals that has access to cutting-edge technology and best-in-class resources. As a new member...
Continue Reading

The Randomness of Global Equity Returns

July 17, 2019 - Investment opportunities exist all around the globe   Across more than 40 countries, there are over 15,000 publicly traded companies. If you listen to the news, however, some countries may seem like better places to invest than others based on how...
Continue Reading

Getting to the Point of a Point

March 22, 2019 - A quick online search for “Dow rallies 500 points” yields a cascade of news stories with similar titles, as does a similar search for “Dow drops 500 points.” These types of headlines may make little sense to some investors, given...
Continue Reading

Return to Blog Home