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The impact of the coronavirus has hit the markets hard, plunging the DOW -1,900 points over the last two days. First and foremost, 2019-nCov (known as coronavirus) is a human tragedy. But, additionally, investors are left with the unenviable task of forecasting and pricing an event that is evolving by the day. As coronavirus cases continue to escalate in several new regions, Great Lakes Wealth believes COVID-19 is approaching pandemic status. Dewey D. Steffen, CEO/CIO of Great Lakes Wealth, offers his comments on what’s currently happening in the markets:
Market Corrections Are a Beautiful Thing!
Dear Great Lakes Wealth Clients & Friends,
As coronavirus cases continue to escalate in several new regions, like South Korea, Italy, Japan, Iran, Singapore and the United States, we believe that COVID-19 is approaching pandemic status. Unforeseen, immeasurable, and intensifying factors such as pandemics lead to market volatility. The truth is that no one really knows the impact that the coronavirus will have, but until recently, the financial markets had been complacent, with low volatility and an expectation of a quick, “V-shaped” recovery.
Unfortunately, the illness – thought to have originated in Wuhan, an important Chinese manufacturing hub – has taken its toll on equity markets, causing disruption in several industries, including travel and energy, as well as major supply chains in India and China. Amid the trade war, supply chains generally migrated away from China to places like Vietnam, Thailand and Mexico; however, global supply chains are deep and complex, and disruptions have already led to halts in motor vehicle production in Japan and South Korea. U.S. firms also face a loss of sales to the Chinese market.
In addition, oil has fallen on concerns over weakened Chinese demand and the risk of further demand impact outside the Asia-Pacific region. While volatility is likely to continue to weigh on certain sectors until the virus is contained, we view any pullback as a potential buying opportunity within our favored sectors. We believe the overall fundamental backdrop and our technical research remains extremely supportive of equities. We believe opportunities to add fundamentally sound positions to your portfolio may present themselves over the near-term. We also believe in selling – for tax-harvesting and other pricing factors – as this situation continues to unfold. We will, of course, continue to monitor the news for indications of broader impacts and share any developments with you.
Bottom Line: We believe that corrections happen for a host of reasons. We also believe that this current volatility will allow us to find mis-priced assets. Buying mis-priced assets is what creates the best opportunity for our clients to make money. Thus, market corrections are a beautiful thing!
Our thoughts are with all those affected. We hope the global response to contain the deadly respiratory disease proves effective soon and that increased public awareness will deter the spread of the virus. To learn more about how to protect yourself and your family, please visit cdc.gov for updates.
Finally, we look forward to discussing this in detail with you on your next scheduled call. If you’re not yet a client and are interested in becoming one, please give us a call at 248.378.1200 or send me an email at deweysteffen@greatlakeswealth.us.
Very truly yours,
Dewey D. Steffen
CEO/Chief Investment Officer
About Great Lakes Wealth
Great Lakes Wealth is an Independent Registered Investment Advisor (RIA), who proudly serves clients by combining Wall Street solutions with Main Street values! Great Lakes Wealth offers goals-based financial planning, strives for best-in-class asset management solutions and provides concierge-style client service. Great Lakes Wealth’s overarching objective is to help each client manage and preserve their wealth, ultimately enjoy their retirement and financial independence, and build a legacy for their loved ones and the charitable causes they support. To learn more about the Great Lakes Wealth advantage, visit:
Website: https://www.greatlakeswealth.us/
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Great Lakes Wealth, LLC is a Registered Investment Advisor. The information provided is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Great Lakes Wealth and its representatives are properly licensed or exempt from licensure. No advice may be rendered without a service agreement in place.Securities offered through Purshe Kaplan Sterling Investments, Member FINRA/SIPC Headquartered at 18 Corporate Woods Blvd., Albany, NY 12211. Purshe Kaplan Sterling Investments and Great Lakes Wealth are not affiliated companies.