February 27, 2020 Investment Brief

Dear Friends,

As a kid, my parents would tell us to “wash our hands” before we ate, and after we came home from school or played outside. Inevitably, I now hear myself repeating the same thing to my kids most days. They rarely react positively to my nagging, but this morning I felt encouraged as I read the CDC recommendations for combatting Coronavirus – of all the actions we can take to slow the spread, washing our hands was listed at number one.

For the past three weeks, we have been watching the virus data released by China, as well as reading articles from sources like USA Today and medical journals like the Lancet & JAMA.  From what we’ve read, the rate of transmission is significantly higher than the regular flu, but does not appear to be particularly lethal except in people who are already sick.

The stock markets fell as a reaction to this shock to the system – a shock that no one had considered before, even as recently as four months ago. Back in November, the market was full of optimism about US-China trade negotiations. Investors anticipated a positive outcome, and the market reacted with gains of over 3% for the month. Today, investors are frightened by the news about the Coronavirus and anticipate more bad news. As we wait for more information, we’re all asking ourselves : how does this affect us?

  • China will experience an economic slowdown as they continue efforts to slow the contagion. Other countries, especially South Korea and Iran, may fall into the same situation. This has yet to affect global production significantly, but will have an impact as existing inventories are depleted.
  • Looking at portfolios after the last few days, equities holdings are down and now worth what they were at the end of October. 

During a time like this, when we’re inundated with concern about future unknowns, there are things within our control and others that are not. Here at the office we’re monitoring your investments…and we’re also washing our hands.

Best,

Josh, Jim, Taylor & Jim

PS – if you’d like to see the full CDC List, click here.

 

Joshua B Gottfried, CFP®, AIF®
Co-Founder and Principal

CERTIFIED FINANCIAL PLANNER™, Practitioner

James D DeMartino, CFP®
CERTIFIED FINANCIAL PLANNER, Practitioner

Taylor C. King, CFP®, CDFA®
CERTIFIED FINANCIAL PLANNER™, Practitioner

Jim Newman, CFA, CFP®
Chartered Financial Analyst® Charterholder
CERTIFIED FINANCIAL PLANNER™

Gottfried & Somberg Wealth Management, LLC
148 Eastern Blvd. Suite 201
P.O. Box 776
Glastonbury, CT  06033
p. 860.430.9104