March 12, 2020
As news of the coronavirus has evolved over the past several days, we feel it is important to communicate how we are responding.
RS Crum’s preparations:
Our number one priority is the health and safety of our clients and team members. Therefore, we are taking several active steps to reduce the risk of passing on the virus:
- Effective immediately, we are postponing all in-person meetings until further notice. Instead, we will utilize telephone conversations and web-hosted video conferencing, as needed. We have been using this technology for several years and we think you will find it quite easy and effective.
- Over the past several days we have been working to help facilitate and enhance the ability for all RS Crum employees to work remotely. If we decide to employ a home-based virtual work environment for our staff, we will remain vigilant in enforcing our strict security protocols in order to protect your important data.
What to expect:
We believe we can make this transition smoothly with our existing technology. Our phone system allows us to be connected and have our extensions ring just like we were in the office. When calling, simply follow the prompts and dial the extension of the RS Crum team member you are trying to reach. From there, your call will automatically be transferred. In the event you need to leave a voicemail message, we will do our best to return calls as soon as possible. All advisors would remain available via email.
A look into the market:
At the end of this unprecedented and tumultuous week, we also want to provide some perspective on the market volatility we have experienced.
The most recent bear market started in October 2007 during the global financial crisis and lasted 17 months. During that time, the S&P 500 declined 57%. In March 2009, the bull market began and the S&P 500 earned 378% though the end of 2019. Historically since the crash of 1929, there have been 12 bear markets with average market decline of 42% and average duration of 22 months. There are many different factors and circumstances to each of these market corrections, but the one thing they all share in common is that they ended. The bull markets that followed had average returns of 164% and an average duration of 54 months. Because this decline was so fast and severe, it is quite possible that the recovery will be quicker than average once the virus and its effects diminish.
Markets and investors fear uncertainty, and because the coronavirus’s potential scale and reach is unknowable, the stock market is immediately pricing in an extremely negative outcome. The long lines and empty store shelves ratchet up the uncertainty even further.
There is little doubt that the economic impact of the coronavirus will be immense, but we also need to remember that the economy and job market were robust heading into this bear market. It is always important to keep in mind that markets trade today on what they think corporate earnings will be 6 to 12 months from now.
If the President, Congress and the Federal Reserve act decisively, we could see the economic picture brighten sooner than expected which should reflect in higher stock prices. With renewed optimism and a few unexpected positive surprises, we could see the uncertainty start to fade away and begin the healing and recovery process.
We have been working nights and weekends to focus on the things we can control like tax-loss harvesting and rebalancing, which we know will benefit you in the long-term.
Finally, thank you for the continued trust and support you have put into our firm and people. We will continue to be there for you and your family, providing advice and guidance for the good and difficult times in your lives. Please reach out to me or our team members directly with any concerns.
Mark Rylance, CFP®