March 18, 2020 –
I called into a local radio program this morning, and I was asked for my comments on the markets. The subject matter was what you would expect. We spoke of the market crash, the Fed’s interest rate activity, the pending stimulus for individuals and small businesses and my general view of the overall situation. While I call into this show on a regular basis, today’s call made me think of another call, on February 3, 2017, when the Dow was set to cross 20,000 for the first time. Heading into November of the previous year, the 2016 election was wrought with concern and uncertainty. I was having various conversations with folks about general ideas being discussed regarding the market’s reaction should Trump or Hillary win. Basically, the general consensus was that, regardless of who won, the market would take a nosedive. The evening of Trump’s win, the US Stock futures plummeted, and it looked like we were on track for a terrible day. The market bounced within minutes, and it never looked back.
The call that February morning was one part shock, that the market was set to cross 20,000, and one part what to do as a result. My comments were simple and straightforward, always remain open-minded and objective, regarding what the stock market can do, and follow your long term plan. Coming into the election, we saw no fundamental reason to adjust our accounts so we did nothing. Our patience and discipline was rewarded. Dow 20,000 was celebrated and was quickly visible in the rear view mirror.
Fast forward four years, and we find ourselves seeing Dow 20,000 once again. This time however, we’re not celebrating this milestone; but, rather, we’re dreading it. There is no joy surrounding this milestone number in the Dow, just fear and panic.
The difficulty at this juncture, which the market is grappling with on a daily basis, is just how this pandemic and virus will play out. The general consensus is that it will get worse before it gets better. Does that translate into 4% unemployment or 24%? The markets don’t know and can’t begin to project this with confidence. Therefore, it is precisely why you’re seeing such erratic behavior and unprecedented volatility.
My days seem to be running together, as I leave the desk for meals and brief interactions with the family. Our office has moved to its SEC required disaster recovery plan locations. This means that we’re fully operational from remote locations and able to conduct 100% of our business with limited time in our physical office.
For our general managed accounts, I believe we have been extremely prudent in our sales thus far, raising cash for clients as this slide has continued. While our cash levels for these accounts are at historic levels, we still cue up more sales with the potential of raising even further cash. We will see how today goes, and, with it being such a fluid situation, we will be making decisions as the day unfolds. Dow at 20,000 is a critical level for us, for a variety of reasons, and one that we’re not taking lightly.
I want to thank those who have sent kind words and affirmations our way over the last several days. I speak for the entire Joule Financial team when I say it is greatly appreciated. Please stay safe during this tumultuous and uncertain time. Should you need anything at all, please do not hesitate to reach out. If you are local and need anything dropped off or need someone to do some shopping for you, by all means, we can help. Please do not hesitate to let us know.