It’s easy to lose a sense of perspective when hit by a surprise crisis. On January 1st, we did not anticipate that dietary habits in the ‘wet markets’ of Wuhan, China would combine with a price war over oil to kill the great bull market that started in 2009.
Wet markets (Wuhan) + price war (Saudi Arabia, Russia) = RIP bull market
Nevertheless, this is the situation in which we find ourselves – and it’s important to maintain a rational perspective on all things related to the crisis. To that end:
- Keep the main thing the main thing. Please remember the first priority is your health and the health of your family. A list of resources to help you weather the crisis was included in our post of March 17. Again, we are available to you.
- A sense of history helps. Gracestone is currently awash in financial data and analysis. The bottom line is that the American economy is resilient. The economy has consistently recovered and then expanded following stressful events, and we expect the same to happen here. Reams of data support this view. Our favorite statistic: Following the financial crisis of 2008-2009, the S&P 500 Index rose by almost 400% from the low of 2009.
- The private sector is being unleashed. Private sector laboratories are developing high speed / high volume tests for the virus and pharmaceutical companies have fast-tracked the development of a vaccine. Facebook has announced a $100 million grant program for small businesses impacted by the virus. Apple is allowing Apple Card customers to skip their March payment without interest and Synovus Bank (the mothership) has instituted payment relief assistance for certain loans. Some communications companies have suspended internet data caps for customers. These are all positive developments, especially when combined with a stimulus plan by the government that is expected to be massive ($1+ trillion).
We believe in the American economy and the American spirit. We’re on this journey with you. Hang in there, and let us know what we can do to help.