Again, markets closed sharply lower yesterday. At the closing bell, the Dow Jones Industrial Average was off 9.99%, gold was down 4.04%, and oil was down another 6.03%.
Joe Barry, Pat Barry, and Kate Alves sat down to discuss yesterday’s selloff, how it compares to past corrections, and where things may be headed next.
The full podcast can be found at the bottom of this post, but a summary of our thoughts are below:
- Two distinct shocks have driven markets lower
- the commerce disruption from COVID-19
- the decision by OPEC to flood the oil market
- Human emotions are driving volatility, but recent price movements are being augmented by trading algorithms.
- As markets fall, we are closely tracking companies that are becoming value investment opportunities. Your accounts have a strong cash position and we are now looking to put this money to work. With that said, we do not want to deploy this cash reserve too quickly.
- With interest rates sharply lower, dividend-paying equities will be an even more important part of our strategy going forward.
- These market events tend to shake-up “market leadership.” Technology stocks (FANGs) have dominated the 2010s, but the marketplace may look different during the 2020’s.
- There are a lot of unknowns surrounding COVID-19, but also many knowns. Click here to read a great FAQ.
- Your team at Barry is working hd to identify opportunities and protect client portfolios.
Information Regarding Corporate Retirement Accounts
For those of you who have 401(k)s and other outside retirement accounts with 20-30% cash levels: we believe, while the volatility may not be over, shifting 5-15% of the cash into equity-oriented mutual funds is a sensible long term move at this time. If you would like us to make a specific recommendation, please send us the relevant information to assist you.
Finally, we want to make you aware that the team at Barry has a Business Continuity Plan that allows us to continue to serve you in uncertain times. You can be confident that someone from our team will be available to address your question or request just as we always have.
If you have questions about your portfolio or our thoughts on the markets, please call your team at 888-992-8601.