This Week in the Market
With Scott McCaghren and Tony LaPorta
Obviously, there are grave concerns regarding the coronavirus and its’ impact on the financial markets. We have prepared the portfolios to deal with the effects as much as possible. Most of the portfolios have managed to avoid roughly half of the downside that major indices have incurred.
We still maintain our position that equities will find a bottom in order to stage a significant rally. It is vitally important to keep a long-term vision on these investments which has been the crux of all institutional investing. It is the average investor that will panic sell; a clear sign that the weakness has concluded.
The reality is that we will likely see more weakness heading into the weekend as investors look to shed weekend-risk. We believe that early next week will bring the opportunistic buyers back into the marketplace to provide a relief rally off of a panic-stricken week.
As mentioned for several weeks, we have multiple components that are allowing the investments protection in order to not get caught up in the panic selling. We absolutely must utilize these positions to our advantage, effectively allowing them to be our cash position. When prices appear to have bottomed out, we will then swap those assets for risk-on type equities.
We constructed a plan months ago for this type of capitulation, we are now seeing the fruits of that labor. We will be releasing a more in-depth short-term plan for all portfolios tomorrow-this will likely be in both audio and written form.
As always, we continue to monitor all equity, treasury, commodity and currency conditions in order to efficiently deploy capital as well as protect invested assets.
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