I remember the moment with great clarity. It was 5:45 in the morning on March 9, 2009. I was at a stop light at the corner of Arden and Ethan, on my way to the office. The date is always etched in my memory, because it was the date my beloved mom had died just three years prior. It was an emotional time. Outside it was still cold. In the stock market, the selling had been relentless. Clients were scared and holding on, only because we told them it was the right thing to do. To be honest, as an advisor in the business for only 5 years, I wasn’t sure I was believing myself anymore. I was listening to CNBC on satellite radio and they announced that an internal memo at Citi showed the bank was operationally positive for the last 3 months. That was a surprise because most major banks were on the brink. The futures came off the deck and the Dow opened 200 points higher. An hour later, CNBC anchor Mark Haines made an historic prediction. “I think we have just seen a generational low,” he said. From there, markets rallied and rallied with great strength. By June of that same year, most averages were up 40% over where they were the morning of March 9.
Was Monday March 23 the Covid low? We don’t know, but I think we will know in the next 4-6 weeks as cases peak. Either way, this week has given all investors a chance to exhale and perhaps step back from committing the number one drag on investor performance over the long haul…. emotional decision-making at the wrong time. As we emerge from this crisis, we will all have a new appreciation of “risk” and can adjust accordingly.
As much as we dislike this COVID-19 episode, the conversations of the past few weeks we have had with clients remind us why we are in the business. Please give us a call at (916) 924-7527 if you have any questions during this time.