Letter to Our Clients – March 13, 2020

March 13, 2020

Dear Clients and Friends, 

We hope you and your family are healthy, and that everyone takes all the appropriate precautions.  Our team at AWM is taking all recommended precautions both in our office and in our personal lives – but how can we replace the time we wanted to spend watching the U of Oregon women’s basketball team winning the national championship?!

In normal times our role is to help you make good decisions about your financial life, and then manage your investment accounts.  In abnormal times, like now, we take on a higher and more challenging role.  We want to help you filter out the noise and hysteria, review past decisions about money management strategies, confirm or revise these strategies, and then follow through on the action – or inaction – agreed upon.

Please be aware that we will still be “open for business” even if we are not able to physically be in the AWM office.  With modern technology we can communicate with you by phone and/or email, do research, make trades, etc., from any place we can use our computers to connect to the internet.  Is this a great world or what?!

Many of you will have friends who have told you they sold all their stocks – weeks ago!  But we know the challenge there.  When is it time to buy back in?  We have been warning for years that a bear market could occur at any time, and likely would be caused by events that could never have been anticipated.  Who would have thought a pandemic would strike and cause this kind of havoc?

We worked with each of you to build an investment strategy that gives the potential for growth in good markets, yet allows you to remain financially stable in bad markets.  We believe that the worst time to change strategy is while markets are falling.  We hope now you can have confidence in your past decisions, because, as we said at the time, we wanted you to have an “all-weather portfolio.”  

The government thinks fiscal stimulus will prevent a recession and revive the stock market.  We hope they are correct.  Still, we should be mentally and emotionally prepared for a significant slowdown of economic activity, or to say it more bluntly, a recession.

In 2008 there were serious threats to the ability of the global economy to function.  This time is different.  The underlying economy was strong before the outbreak, and there appears to have been no threat to the banking and credit markets as there was in 2008.  The financial markets now, we believe, are anticipating the short-term decline in the economy.  Once an economic rebound starts to occur, the financial markets will likely anticipate the economic recovery and begin to rise.   

As always, we encourage you to contact us if there is anything you would like to discuss.  And, as always, we are so grateful for the opportunity to work with you.

Thanks and best wishes, 

Robert K. Haley, CFP® AIF®