Cool Heads Prevail

Most of us are a little on edge as the coronavirus spreads across the globe. Some are anxious about the health of their loved ones, while others are worried how their financial lives will be impacted by the uncertainty in the stock market. During our conversations, you’ve probably heard us say “control the things you can control”.

The markets are designed to handle uncertainty. As new information comes to light and is processed, prices of investments fluctuate. We have seen significant swings in the stock market over the past month and it is likely to continue as new information surfaces. As you can imagine, all of us at Novi Wealth have been observing and evaluating how to manage this current situation. There are many elements that go into ensuring we approach this in a diligent and careful manner.

When we invest for our clients, it is not in a vacuum. Our approach takes into consideration two primary elements: our client’s circumstances and a clearly defined and disciplined investment approach.

We have always believed that you should focus on the elements that you can control. We cannot control how the markets will react based on recent events or news. No one will know until they look back two or three years later. At that point, the markets will likely be higher than they are today. So, good behavior with an appropriate asset allocation based on your circumstances is of utmost important and something you can control.

In attempt to alleviate some of the fear surrounding the events today, we would like to share a piece that was created after the Great Recession. Although it was a different experience, it still had similar features - significant uncertainty and high market volatility with sharp market declines. In the end, it was an uncomfortable journey, but the disciplined investors fared well in the long run – cool heads prevailed.

If you find this useful and would like to have a conversation, please feel free to reach out.