March 23, 2020

As I draft this message in late March of 2020, the COVID-19 pandemic continues to cast a long shadow worldwide. More than 400,000 people have been infected across the globe and several thousand have passed away. This is a trying time and our thoughts and prayers are with those who have been impacted by this terrible disease. 

More than anything, this is a time to live out our values. At Whitnell, family-first is more than just a nice idea. It has been our mission since our founding and despite the global pandemic, we remain committed to family-first. We have taken numerous steps to protect our clients’ families and our own families. In that spirit, I wanted to pass along some information about how we’re responding to this crisis:

  • Communication. Our advisors have been spending countless hours each day reaching out to clients to ensure we remain connected. In addition, we have offered several market update calls and sent periodic written pieces outlining our thoughts on what has become an incredibly volatile economic environment. 
  • Availability. We are doing everything possible to be available to our clients. We have complied with the Illinois Governor’s mandate to shelter-in-place. Please be patient with us as we contend with work-from-home situations that may be challenging.
  • All Systems Go. We remain “open for business”, leveraging a recently enhanced remote access capability. This allows our staff to seamlessly serve your needs primarily through the use of digital tools and technology. We appreciate your understanding of this unique working arrangement.
  • Consultations. Planning is the basis of our client relationships. Timing of market disruptions cannot be predicted but their occurrence is built into our financial modeling. As always, please discuss any changes to your long-term goals with your advisor.

Above all else, my hope is that you and your family will remain healthy in this anxious climate and possibly even make some great memories from your time together. 

 

A NOTE FROM DAVID PECKENPAUGH, WHITNELL’S CHIEF INVESTMENT OFFICER

On February 12, 2020, the Dow Jones Industrial Average closed at 29,551. A mere 40 days later, the Dow closed at 18,591 (March 23, 2020). Many people are wondering—how low will it go? Is this the bottom? Will we come roaring back, like so many have predicted? How will this impact our family’s long-term goals? While I cannot predict the future, I would make two observations.

First, there is every indication that this economic malaise is heavily correlated to the COVID-19 global pandemic and the shelter in place orders designed to limit it’s advance. Therefore, it stands to reason that as the effects of the coronavirus subside, so also might the economic impacts. How long it will take to fully recover remains uncertain. What does not seem uncertain, however, at this time, is that a recovery will take place. 

Second, this market correction is a good reminder to all of us about the importance of time and patience. My father wrote a wonderful article about this several years ago. In the article, he quotes one of the oldest known books about investing, Joseph de la Vega’s Confusion of Confusions: “He who knows how to endure blows without being terrified by the misfortune resembles the lion who answers the thunder with a roar and is unlike the deer who, stunned by the thunder, tries to flee."

While you may not feel like a lion right now, I want to remind you of two important things. First, your family has a plan and it was uniquely designed by your Whitnell relationship manager to achieve your long-term goals. Your plan assumes that market corrections will take place, much the way we are experiencing right now. Believe it or not, this disruption is part of the plan. 

Second, it is probably not a good idea to make major changes right now. Selling during a down-turn is a sure-fire way to lock-in losses and lose all hope of recovery. But buying may not be particularly advisable either. If you are thinking of making changes, here is the question I would ask: what has changed in your long-term goals? If nothing has changed, making changes may not be advisable. 

Whitnell’s Investment Committee continues to meet during this time and we are watching the markets closely. We have the benefit of several decades worth of data to draw upon for comparators to our current situation. It is not uncommon for events like we are seeing now to produce sharp, but often short-lived, down-turns. If something were to change our long-term perspective, we would be in contact with you to discuss any recommended changes to your plan. 

Based on everything we can see right now, we don’t believe the economic impact of COVID-19 will have a lasting impact into 2021 and beyond. But, of course, this is a dynamic situation and subject to change. We remain committed to being as forthright and communicative as possible. 
 

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"I'm really passionate about building an integrated plan for my clients. Taxes, retirement, investments, estate planning and so much more. I care about getting the details right."

 

© 2020 Whitnell & Co.  The information contained in this article is provided for informational purposes only.