Market Commentary Q1 2020

Traditions Wealth Advisors—Market Commentary- Q1, 2020

The Coronavirus has left no person unaffected by its incredible suffering and loss of lives.  While it is easy to be consumed by negativity, we remain positive.  We have seen our government utilizing both monetary and fiscal policy to a capacity never seen before.

• Washington has passed the largest economic stimulus package in history and stands
• ready to stimulate more.
• The Federal Reserve has cut short-term interest rates to zero and has implemented it’s largest and most comprehensive asset purchasing program ever.
• Modern medicine and human ingenuity will likely help save many lives and eventually find a vaccine.
• Humanity has pulled out all of the stops to defeat the Coronavirus, and we shall prevail.

Some doomsayers are forecasting a depression. It is said that in the 1930’s Roosevelt willingly experimented with economic policy which probably did more to lengthen the depression than to halt it.  Some of the policies created were:

• The Fed tightened monetary conditions
• Income taxes were increased on corporations and individuals
• The federal government regulations increased meaningfully

The policies made during the Great Depression were indeed a mistake. Three for three as far as policy mistakes are concerned.  Today, monetary and fiscal policymakers are obviously not making the same mistakes as those made in the 1930’s.

Historically, large stock selloffs as recently experienced have presented buying opportunities for serious long-term investors.  Remember that short-term fluctuations are meaningless.  Today, insider buying is at levels not seen since 2008-2009.

We remain optimistic.  Long-term investors have always been rewarded by taking advantage of buying opportunities when others are fearful.  And although this pandemic is horrendous, never underestimate the power of prayer.

Traditions Wealth Advisors is here for you. We will slowly be coming back to the office next week, but only 1 or 2 of us in the office at a time, while most employees will be working from home.  We look forward to hearing from you.
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Brien, Sarah and Michael