On February 26, 2020, we sent an update to our clients regarding the COVID-19 and the Coronavirus. You can access a pdf of this full letter by clicking on this link COVID-19-Coronavirus-Letter. We have also pasted two sections from the whitepaper below for easy access.
What Steps should You Take
We recommend that you consider the following reactions to the recent drop in equity markets caused by COVID-19: 1) refinance your home or buy a new home while mortgage rates are lower, 2) have confidence that your asset allocation is set at the right risk level for you and that the mix of investments will make the decrease in your portfolio manageable for you relative to the overall market drop, 3) if you realize that your current portfolio is too aggressive or too conservative based on your reaction to the drop, please reach out to us so that we can reevaluate your allocation, and 4) take the opportunity to buy more equities if you have some available cash.
The 10-yr Treasury yield is at an all-time low of 1.33% and 30-yr mortgage rates are close to all-time lows at around 3.5%. If you were looking to buy a home or refinance anyway today would be a good time to lock in your rate.
Summary
Periods of uncertainty with abrupt market pull backs can be alarming. Couple this with the media’s desire to generate interest and attract viewers and it leads to a seemingly constant supply of news stories that could easily cause us to overreact to the uncertainty. Imagine if every winter we watched a website that tracked all cases worldwide of those diagnosed with the flu and reported each flu related death. We might spend the rest of our lives standing at the sink washing our hands.
This report in no way is meant to minimize the potential risk of COVID-19 or the impact that it has already had on those who have been infected with or died from complications related to the disease. Rather, it hopefully puts the number of people affected in perspective in relationship to past epidemics of new diseases and common diseases we deal with every year while providing some insight into why the markets have reacted so sharply and steps you can take.
We will continue to monitor developments as they occur but currently see nothing that would cause us to recommend a change to your long-term strategic investment allocation. We appreciate the opportunity to partner with you in developing real and meaningful wealth and thank you for the trust that you continue to show in us.