At Tall Oak Private Wealth of Raymond James Ltd., our Portfolio Managers have each been in the financial industry for two decades or more.
We’ve seen and been through a lot. We were around during the 1997 Asian financial crisis, the 1998 Russian financial crisis, the 2000 dot-com bubble, the 2001 Sept 11 attacks, the 2008 financial crisis, the 2010 European sovereign debt crisis. We’ve spent countless hours studying previous market collapses and spoken to many wisened market leaders.
While the root cause, the severity, the speed of the decline, the potential contagion or the fiscal or monetary responses differ for each of these events, one common element never changes. Investors and media talking heads always think this time is different and things will not improve or go back to the way they were.
Reasons this time is different:
- This is a global pandemic!
- All world economies are correcting at the same time.
- All global economies are so closely tied.
- Interest rates are very low already.
- Governments, corporations and individuals have too much debt.
- We won’t be able to stimulate a health crisis with financial stimulus.
- The list goes on.
And while these arguments are worthy of discussion what we do know is that this time is not different in that economies will rebound at some point. The markets will lead that rebound. Market rebounds tend to include quick and strong sudden moves up as opposed to very gradual increases.
This may take time, but markets will rebound and cash raised earlier this year allows us to buy great companies at very attractive prices. We have been defensive. We have also prepared our shopping list. Portfolios, while being down year to date, have held up relatively well. We have been defensive and it has paid off. We are now looking at opportunities, companies with good balance sheets and are market leaders that are going to come out of this leaner and better positioned from a competitive standpoint.
We are going to see economic pain around us for some time to come with the social distancing curtailing events, large gatherings, sporting events, restaurant visits, travel etc. This is going to create much stress to our medical system and our admirable physicians and health care workers on the front line.
But this time is not different. Normalcy will return, markets will rebound and economies will improve globally.
We are working hard to ensure that we are managing portfolios through these challenging times.
We welcome you to reach out to us to discuss how this impacts your personal portfolios as we remain just a phone call away.
As always, we thank you for the trust you place in us.