“Off The Wall” Blog
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The Haystack: No matches were found
By Erin M. Hay, CFA | Mar 19, 2020 | Weekly Market Commentary
“The sea was angry that day, my friends. Like an old man trying to return soup at a deli.” -George Costanza
Replace “sea” with “market” and it kinda sums up the past three weeks, doesn’t it?
- On Monday, volatility surpassed levels seen in 2008
- For the first time since 1929, equities moved at least 4% every day of a single trading week (From March 9th to March 13th)
- The velocity of the current drawdown in equities is simply unprecedented
- There has literally been no place to hide, except cash
Opening levity aside, market post-mortems are out in spades, so I thought I would take a different tact in today’s note.
Like everyone here at Monument, I read a lot of research, including the house views from most major investment shops. For fun, I downloaded a dozen or so “2020 previews” in PDF form and decided to take “Ctrl-F” for a spin.
- Open 50-page PDF, crammed with ungodly amounts of intricate, well-thought out commentary, footnotes, disclosures and risks. The amount of CFA and PhD suffixes in these documents is mind boggling.
- Enter search term “Virus”
Here’s the result on each of those dozen or so reports:
What was interesting was the common risk themes across each of those pieces – they included: geopolitics, elections, climate change, inflation, trade tensions, Brexit, so on and so forth.
But nothing on viruses, global pandemics, contagion or any related topic.
And then out of left field comes COVID-19.
Admittedly, a tremendous amount of blood, sweat and tears go into these research pieces, and the intellectual firepower behind the curtains is incredible. But market prognostication is an impossible, thankless job. While it does help investors set baseline expectations and think through the range of plausible scenarios, it can never be relied on.
The point of this isn’t to dunk on people who make market forecasts, but rather to highlight that no one can really forecast events – in other words, “Shit Happens”, which is why having a solid strategy, plan and process in place before something unexpected happens is the only true way to reduce risk to a portfolio. Investing is hard, and I’m fond of this unattributed investing trope: “the market will try to screw over as many people as it possibly can.” I think the past three weeks have proven that.
If you haven’t seen the blogs that Dave put out this week, they are worthy of reading:
- From 3/18: This is more critical than anything you’ve done in the past 10 years.
- From 3/17: Certainty during complex uncertainty
We are here for you – call us with questions or concerns. Dave said it well yesterday:
“Now is the time to make sure your portfolio is positioned for a future recovery…it is NOT the time to create a portfolio that you wish you had when this all started.”
Important Disclosure Information
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Wealth Management), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.
All indexes referenced are unmanaged and cannot be invested into directly. The economic forecasts set forth may not develop as predicted. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument Wealth Management. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Monument Wealth Management is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice.
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Erin M. Hay
Private Wealth Advisor, Portfolio Manager
A graduate of the University of Oklahoma, Erin began his investment management career with J.P. Morgan Private Bank. There, he worked with portfolio managers, traders and asset class specialists to bring tailored investment solutions to his team’s high net worth clients. However, intellectual curiosity would dictate both a change in geography and job description.
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