Over the last month, we have experienced extreme market volatility due to the Coronavirus contagion. To date, there have been over 10,000 deaths globally.

To that end, we have also seen Central Banks employ multiple strategies hoping to calm market volatility. We now feel that we are “near the bottom” regarding the “EXTREME” market swings. This is not to say that things will return to normal. Unfortunately we do not feel that this will be a fast recovery. We are expecting a slow recovery as a result of the “systemic” impact.

Market sectors that we feel are at risk are as follows:

Energy

Industrials

Materials

Sectors that could have a slow recovery are as follows:

Real Estate

Financials

Utilities

Health Care

Consumer Staples

Sectors that could have a faster than normal recovery:

Information Technology

Communication Services

Consumer Discretionary

Should the above occur, we are looking to take advantage of this traumatic event by repositioning our portfolios. However, we will remain cautious in our approach because of the continued “systemic” concerns that could threaten our recovery. Those being:

– Low Inflation

– Low global demand

– Low global supply

– Rise in unemployment

– Increased defaults on debts due to business closings

– Continued concerns of contagion

– Infrastructure in the workplace (companies looking to expand a remote working force)

Obviously, we are not out of the woods, and you should not expect any immediate major investment moves. However, we do think that we have seen the worst of the “hard-hits” and will make calculated decisions to protect and re-build your portfolios.

As much as we don’t like to lose value for our clients, we are thankful that going into this situation, we expected increased volatility and thus had a defensive approach to your investing needs. That said, it is time for us to get back to work for you as we move into the next chapter of the Coronavirus contagion.