Welcome to the 21st century, Mr. Silverstein. As market conditions are moving very rapidly, I thought I would utilize our technology a little better to stay in consistent contact with you. With that …
The longest bull market in stock market history is finally over. On March 10, 2009, the late Mark Haines said, “I do believe this is the bottom,” and he was right. Since that date, the bull market has come to the brink of another bear market twice, but always pulled back from the brink. However, on March 11, 2020 we can finally wipe the slate clean. Then, on March 12, we proceeded to have the single worst day since October 1987. That was painful. We do not have a real clue how long the bear market will last, but my hunch is that the worst is over in terms of speed of losses. It is my understanding this is the fastest bear market in history. The speed with which this happened is purely a function of Coronavirus.
In almost every bear market, there comes a point of ‘capitulation’. This is the moment when the weakest of stock investors sell their stocks because they cannot take the volatility anymore and it often represents the bottom. Was March 12 that moment? It’s very possible. As I write this, the market is up about 3 percent on March 13. Not overwhelming strength, but better than we have seen.
One more thing to point out…This is not a replay of the financial crisis of 2008. Banks have excellent balance sheets and liquidity, the lifeblood of the economy, is still very strong.
We understand what the uncertainty we are facing means to all of you. At the moment, we are staying the course for the vast majority of clients. We will continue to listen to the most up to date information and will keep you apprised of any changes to this approach. As market conditions improve, we will look closely at each of your allocations and for opportunities that improving markets will bring.
Be safe. As always, please contact us if you have any questions at 585-678-8000.
Mike, Judy and the FFP Team