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Market Comment from Pacific Wealth Management (March 13)

Investing Insights

  • A multitude of negative data suggests the bottoming process for the stock market will likely take time.  In the interim we expect a prolonged period of volatility.
  • Fortunately, our investments were strategically underweight stocks before the corona-virus news hit, effectively reducing the impact of the stock market downdraft.
  • Beginning Monday, March 16th, most of Pacific Wealth Management will be working remotely to protect client’s health and that of our team. 
  • The technology enhancements we have made enables us to retain full functionality and control to diligently continue overseeing client financial assets.
  • We encourage you to let us know if you have any concerns or questions. 

The financial market volatility surrounding COVID-19 continues at historic levels.  The harshness of the decline, combined with a collapse in oil prices, along with ongoing downward earnings revisions, suggest the bottoming process for the stock market will likely take some time.  The significant human toll is unprecedented and certainly the primary driver of the fear continuing to grip the financial markets. As we mentioned in last week’s comment, we believe markets around the world will be enduring a prolonged, difficult period of both upside and downside volatility over the next few months.

The most incredible aspect of this bear market has been the speed in which it occurred.  27 days ago  U.S. stocks were at all-time highs.  Fortunately, our investments were strategically underweight stocks before the corona-virus news hit.  Governments and central banks around the world are now responding with interest rate cuts and fiscal policy initiatives to help the global economy weather this  pandemic.   This combined with a deeply oversold stock market, fear and extreme pessimism, will eventually set the stage for a powerful reversal rally and cyclical bull market recovery.

While the scientific and medical community around the world continue racing to produce a vaccine, the disciplined diversification in our Pacific Wealth Management portfolios are effectively reducing the impact of the stock market downdraft.

We believe, for the time being, it is prudent to embrace an abundance of caution to safeguard both our clients and the Pacific Wealth Management team until this corona-virus storm subsides.  Most of our team will be working remotely beginning Monday, March 16th.  Fortunately, the technology enhancements we have made over the last 2 years enables us to retain full functionality and control to diligently oversee client financial assets.  Our contact information will remain the same and we encourage you to let us know if you have any concerns or questions. 

https://www.wsj.com/articles/the-dos-and-donts-of-handwashing-11583952006?mod=hp_lead_pos10


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