April 1, 2020

Good Wednesday morning,

We begin the second quarter (Q2) of 2020 with the market declining again, and again due to fear and uncertainty about the spread and eventual death toll of the Coronavirus.  The Administration’s statement yesterday that deaths in the U.S. due to the CV could be between 100,000 and 200,000 are weighing heavy on the minds of all Americans and, unfortunately, the investment markets, too.

As of this morning, KSBW is reporting there are 42 cases of CV in Monterey County – half in Salinas – and four deaths.

Uncertainty is driving this market lower, but as we saw from March 24 to 26 when the Dow gained 3,960 points (21.3%), clarity about getting past this virus will turn this around.  The stock market is a leading indicator, and with clarity – or even hope – we believe the investment markets will reverse its downward spiral and reach previous highs.  “When” is the big unknown.

On a daily basis, we monitor all portfolios and individual portfolio holdings and engage with industry experts on a variety of management topics, primarily through Commonwealth but also through BlackRock and JP Morgan.  Our two goals are to seek to position our portfolios to provide as much protection as possible (very difficult in the environment), and position for recovery.  Declines are temporary, recoveries are permanent.  In time we will get through this decline - declines always end - but we cannot miss the recovery.

Please stay safe and healthy.