We Need to Stabilize

I wish you and your family safety and good health during this extraordinarily difficult and dangerous time.

We badly need stabilization in the markets. The market has dropped over 30%, the swiftest decline of that magnitude in history. For the time being, the most urgent hope is the market somehow reaches, at least, a temporary low point and arrests this decline.

 

Usually, we can count on the Federal Reserve to stabilize the market but this time Fed policy is not providing support. Additionally, no government proposal offered, so far, is reassuring the stock market.

The market continues its daily 1000-plus point swings as it moves to successively lower levels. The dramatic volatility is terrible trading behavior and is unsettling to investors.

We are braced for more bad news on the COVID 19, and consequently, the economy. But, this does not mean the market has to erode further.

Hopefully, most of the damage has been done.

During these exceedingly tense days, we are counting on stocks to discount the negative effects of the Coronavirus and gradually de-sensitize from the intense news flow that we are seeing.

There is a lot of noise out there about the virus and its impact on markets. You need to be suspicious of the intent, and dubious of the usefulness of this content. These messages are veiled and self-serving. They are usually amplified by alarmist content. These sharpened views are not constructive in addressing this unprecedented crisis.

Wall Street wants all its investors to stand pat over the long term because their business sells financial products. Ardent doomsayers, on the other hand, try to gain credibility and influence by predicting deep deterioration of markets and the economy. Both parties are self-serving and we don’t need either.

Within a reasonable period of time, there should be some stabilization in the stock market. Once volatility subsides, we can make an assessment of investment prospects for the upcoming months.

Dan Botti
03/20/20

 


Peregrine Asset Advisers ● 9755 SW Barnes Rd. Suite 295 ● Portland Oregon 97225
503.459.4651 ● 800.278.1420 ● www.peregrineaa.com


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*Past Performance is no guarantee of future results. Investment management involves the possibility of losses. Significant general stock market moves up and down can influence the performance of client portfolios. Composite returns are based on client portfolios of over $100,000. Not all clients are included in the composites. All returns include the reinvestment of dividends. All returns are net of fees. Composite returns are derived from aggregated, time weighted returns for clients of Peregrine Asset Advisers. Individual client returns can deviate from the composite returns. While Peregrine uses the S&P 500 as a benchmark, Peregrine does not attempt to mimic the structure of this index. Individual client portfolios vary. The number of stock positions also varies per client.