The headlines are a mess, on March 12th I am reading “US travel restrictions fuel global stock rout,” “NBA suspends season,” “Virus called Pandemic by WHO.” We have a clear plan of what we want to accomplish, but it’s only human to ask “what do we do now?”
Yet in my devotional, I read Isaiah 33:21 “The Lord in majesty will be for us!” Wow, the creator God of the universe is for us? His Word says so. It says that “God causes all things to work together for good…” and “If God is for us, who can be against us.” This does not mean that life is easy. We can get sick and our investments can go down like everyone else. But it gives us a completely different perspective to know that “for those who love God and are called according to His purpose” that these events have a good purpose in our lives.
So, what do we do now?
At Sound, we are watching three events:
1 - The Coronavirus and its economic impact.
2 - The Oil pricing war and its market impact.
3 - The US Fed, and will they step in to provide liquidity.
At the moment, there is a major “fear trade” happening. We do not want to nor recommend to anyone that they get pulled into this simply because they “have to sell” something. We understand the fear, but that can lead to bad decisions. In all of our models, we have taken a step more conservative and are looking for a good time to take further steps.
So, what do we do next?
At Sound, we are taking these three actions: 1. Risk-off: we have already moved our clients’ accounts risk-off which is a step conservative. 2. We are measuring data. We want to rebalance accounts to potentially perform better in a prolonged downturn but do this at an opportunistic time. 3. We are building a stock list for the future. Currently, a lot of good companies that do great work are being sold off. We believe there will be a time in the future when these events are over and these companies turn around. We want to be prepared to invest our clients’ money into these because we believe a brighter future is ahead.
I have been thinking about this verse for weeks, and now I know why: “Blessed is the man who trusts in the Lord and has made the Lord his hope and confidence. He is like a tree planted along a riverbank, with its roots reaching deep into the water—a tree not bothered by the heat nor worried by long months of drought. Its leaves stay green, and it goes right on producing all its luscious fruit.” Jeremiah 17:7-8 (NLT)
Certainly, it’s a little hot right now so this verse fits us well.
Thank you for your trust in us. We are working hard for you!
The Sound Financial Team