This past month has been a historical time. We are witnessing the first broad pandemic to affect the US in 102 years and some of the worst market conditions in 91 years.

What a dreadful way to start an article! The good news is that in the past 100 years we have learned far more about pestilence in our society and markets. Far more action was taken at every level in our communities than at any time in recent memory. Our governments from Washington D.C. to the most local level gradually, then quickly, enforced social distancing to stop the spread of COVID-19. The US Federal Reserve took quick action by pushing billions of dollars through the markets.

At Sound, we have taken multiple steps to move accounts to more conservative. (Yet, please keep in mind this article is not about any one person’s account but our models as a whole, nor is this meant to be individual advice.)

Our Actions:

  • We went ‘risk-off’ on February 28th – that means we sold out of some equity positions, and moved more into bonds.
  • 2 weeks later (after the initial pandemonium in the market) - we sold more equities, and moved that money to cash.
  • March 31st (after calm was restored to the bond market) – we rebalanced many accounts, moving cash to bonds and trimming stock positions.

    The Result:

    The result has been that the majority of our portfolios are down by less than half of the S&P 500 downward movement for the month of March.

    The Future (Encouraging Signs):

    • The Federal Reserve has taken unprecedented steps to support the market, and they have announced they will do “whatever it takes”.
    • The government and private companies are stepping up efforts to control the spread of the virus.
    • The federal government has passed the CARES Act to provide a massive $2 trillion stimulus package to support individuals and businesses most affected by the virus.

      In the future, we will move our rules-based signal from a monthly signal to a weekly signal. This is the data measurement that indicates to us to move accounts‘risk-on’ or ‘risk-off’. Our goal is to be agile in these markets. Also, there is a lot of talk in the news about a “V” shaped market. We are taking these predictions with a “grain of salt” and will invest according to what the data is telling us.

      Above all else, we keep in mind that our good Lord is in charge. Our prayers are that His will be done and our prayers are for you!

      “May the Lord answer you in the day of trouble. May He grant you your heart’s desire. Some boast in chariots and some in horses, but we will boast in the name of the Lord, our God. Save, O Lord; may the King answer us in the day we call.” Psalm 20


      Investment Advisory Services offered through Sound Financial Strategies Group, LLC (SFSG), a Registered Investment Adviser. Certain representatives of SFSG are also Registered Representatives offering securities through APW Capital, Inc., Member FINRA/SIPC, 100 Enterprise Drive, Suite 504, Rockaway, NJ 07866 (800)637-3211. SFSG and APW Capital are separate and unrelated companies.
      The opinions expressed are those of Sound Financial Strategies Group, LLC (“Sound”). The opinions referenced are as of the date of publication and are subject to change without notice. This information is not a recommendation to buy or sell a particular security or to invest in any particular sector. Forward-looking statements are not guaranteed. Sound reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs, and there is no guarantee that its assessment of investments will be accurate. This information is not intended to be investment advice and does not take into account specific client investment objectives. Before investing, an investor should consider his or her investment goals and risk comfort levels and consult with his or her investment adviser and tax professional.
      Sound is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Sound’s investment advisory services can be found in its Form ADV Part 2, which is available upon request.SFS-20-54
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