March 19, 2020
As our country and the rest of the world grapple with the global coronavirus pandemic, we are saddened for those who have experienced loss and for those who are anxious over loved ones who may be suffering. We feel concern for those who have lost jobs and may even lose their livelihood as a result of the virtual shutdown of whole segments of our economy. We admire those in the healthcare field who are working tirelessly at risk to themselves. We pray for those in leadership for wisdom and discernment to respond to what each day brings. While we are certainly a blessed nation, right now we are a hurting and concerned nation.
Financial markets clearly reflect the uncertainty and disruption that have come upon us so rapidly. Our record-breaking economic expansion would appear to be over and a long-running bull market has ended. Most asset classes are experiencing pain, and diversification seems to have provided little relief. In the short-run, this is not unusual during events that create extreme volatility and it adds to the unpleasantness.
Central banks around the globe are responding with steps to backstop financial institutions and provide needed liquidity to keep markets functioning. The Federal Reserve has been particularly aggressive and is demonstrating a “whatever it takes” mindset to shore up confidence. Our legislative and executive branches are finding common ground in crafting stimulus measures to support businesses and individuals negatively impacted by steps taken to stop the spread of the coronavirus. Most recently, as of March 25, the Senate approved a $2 trillion stimulus package, which will go to the House next for a vote. These are welcome moves and seem to be on a track that exhibits urgency.
Taking a step back, we are reminded that successful investing is a marathon rather than a sprint and a long-term perspective is easy to forget during times like these. Similar to the urge to run to the supermarket to satisfy the urge to take action, any action—investors are tempted to believe portfolio adjustments MUST be necessary.
At Ronald Blue Trust, our approach is built around preparation rather than reaction. Helping clients align short- and intermediate-term cash flow needs with more stable and liquid investments prepares them for times like today, when long-term growth assets experience severe declines. History suggests those downdrafts pass, recovery follows and long-term investments left in place can participate in that rebound. As a firm, we are monitoring markets, communicating with our external money managers, and evaluating opportunities given market movements. As always, the appropriateness of your personal financial plan is our focus and priority.
Most of us have seen our normal daily routines disrupted as we either work remotely or are forced to avoid almost all social interaction. Perhaps this time of being in our homes, and in some cases surrounded only by immediate family, provides an opportunity to escape our normal busyness and reflect on 1) what is most important and 2) who is in control. If we can gaze past the uncertainty of today, our ability to see a brighter future is possible.
Rather than rebounding markets and a coronavirus cure, our hope belongs in the One who loves us, provides for us, and gives us strength. His promises are true and He is always faithful.
For the eyes of the LORD move to and fro throughout the earth that He may strongly support those whose heart is completely His. -2 Chronicles 16:9a (NASB)
Scripture quotations taken from the New American Standard Bible® (NASB), Copyright © 1960, 1962, 1963, 1968, 1971, 1972, 1973, 1975, 1977, 1995 by The Lockman Foundation. Used by permission. www.Lockman.org