March 12, 2020
You may be asking yourself how do I weather the storm we are in today? Our answer is simple. Stay calm and invest wisely. With the equity markets having their biggest one-day decline since 1987, we wanted to give you an update on our thoughts at Leisure Capital Management:
#1 Market Corrections Happen
- We have seen this before, most recently at the end of 2018. While the severity of it comes as a surprise, it does happen on occasion, as do recoveries from these steep declines. Our focus is making sure we have suitable allocations to various investments so that our clients can persevere through market downturns.
- The Federal Reserve and European Central Bank have taken action to assist in providing market liquidity and normal banking operations. It may take some time for the financial markets to respond to it, but the efforts are aggressive and will continue to be until we see price stability.
#2 COVID-19 Reaction is a rational fear of the unknown that is causing some irrational behavior
- We continue to monitor and track developments with regard to the COVID-19 outbreak and there are still many questions that need to be answered for investors.
- Our primary concerns surround the health of our employees and our clients.
- We have business continuity plans and are evaluating COVID-19 with regards to the potential that we will have to work offsite. We have made significant investments in infrastructure to ensure our technology can be cloud-based and portable in the event of emergency. In the event of an office closure, communication and operations should all be normal barring any unusual circumstances.
- For the time being, our offices remain open; yet, we are prepared to modify our approach as needed based on various scenarios as well as the new information from the Center for Disease Control and local officials.
- We feel that we are well positioned in relation to the market, portfolio risks, and in terms of investment opportunities.
#3 Our Investment Sentiment
- Our professional team has experienced this market volatility before. We have digested years of ups and downs and understand that it is confusing to most individuals on what to do. We are here to guide you with your individual questions.
- Aside from exposure to stocks, we have diversified many of our portfolios with bonds and multi-strategy investments designed to make our strategy more durable during these types of times. We have communicated the value of this diversification to our clients over time and these strategies are exhibiting much less volatility than a pure stock portfolio.
- Our strategy focuses on company fundamentals, and we believe our portfolios should weather the storm as they have in prior market sell-offs.
- As we move through the crisis, we expect opportunities to arise in high-quality companies at great prices.
- We are continuously assessing the risks and opportunities for the benefit of our clients’ portfolios.
- Despite the market volatility, we are not changing the manner in which we manage client assets. We believe our clients benefit from our process that is largely unemotional and proactive to the long-term needs of each relationship.
We will continue to actively monitor developments with the COVID-19 outbreak and welcome any questions you may have.
Thank you for your continued confidence in Leisure Capital Management. We are here for you always.
This storm too shall pass.