LGT ProfitSense Insights

COVID-19 and the Market Changes

Written by Miller Bentley, Financial Advisor | Mar 25, 2020

First of all, I hope that you and those closest to you are staying safe as the COVID-19 pandemic continues to affect families, communities, and businesses throughout our country and the world. Your health is of utmost importance in these tumultuous times. While there are various ongoing challenges faced during this outbreak, we want to ensure that you and your loved ones are taken care of in order to mitigate the shock throughout the development of this crisis. We understand you have many questions and concerns pertaining to the virus’s direct impact on your physical and financial well-being, so we want to share the steps we have taken not only in the past few days but throughout the past few quarters to adapt to this new environment.

We are committed to the safety of our employees and clients alike while maintaining the highest quality of service that you have come to expect from your trusted advisors, therefore we have enabled employees to continue their normal work functionality through remote channels to avoid potential encounters with the coronavirus. We are fully operational and continue to work through this change as close to normal as possible. We are available to answer any questions you might have, discuss your financial plan, and provide guidance through telephone or email communication.

As for the market uncertainty, we are continuing to closely oversee the volatile trends that the stock and bond markets are experiencing. The market swings have been significant and unsettling, and they are fueled by the unknowns of the coronavirus pandemic. For tenured investors this is not the first encounter with extreme volatility, going back to Black Monday in 1987, the Tech Bubble in 2000, and the Great Recession in 2008/2009 to name a few. Yet over the past 40 years only 9 intra-year declines have led to a down year for the markets. For comparison, equities during the Black Monday pullback saw intra-year declines of 34%, 49% during the Tech Bubble, 57% during the Great Recession, and so far we have felt a little over 30% drawdown during the coronavirus pandemic. In each of these historical situations the equity markets have significantly rebounded the following year, posting an average increase of 20%.

As hard as it might be, it is imperative to focus on long-term goals and not be sidetracked by short-term market disruptions. In fact, these volatile markets shine a light on the importance of communication and staying the course with your financial plan. LGT Financial Advisors has years of experience in dealing with extreme market volatility and we are committed to weathering this storm through the strategic planning we have rooted ourselves in since our founding.

From all of us at LGT we hope you and your loved ones are able to stay vigilant in keeping your health a priority. Your peace of mind and well-being are our top priority, and we remain available to discuss any questions or concerns that might arise from such trying times. We have also created an additional resource about the market trends and updates on our COVID-19 resource page. Keep an eye out for additional information over the coming weeks ahead.

Thank you for continuing to allow us to be your trusted advisor and for the opportunity to serve you along the way.