Stock market volatility has continued this morning, leading to the trigger of market-wide circuit breakers. Put simply, market exchanges have mechanisms in place to try to help reduce panicked selling. The New York Stock Exchange declined by more than 7% this morning at the open, which triggered the first circuit breaker that halted trading for 15 minutes. There will be another temporary pause if the market declines by 13% and the market would close for the day if we see a drop in excess of 20%.
We want to highlight a few points to keep in mind during this time:
- Your core bond positions are up 5% year to date and are softening the impact of the stock market declines. Your bonds, and more importantly the financial planning work done to determine the appropriate bond allocation for your specific situation, are what allows us to stay the course during this uncomfortable ride.
- For those clients with large cash balances or those under their target stock allocation, we are viewing this as an opportunity to buy stocks on sale.
- A diversified investor was up double digits in 2019 so performance is still positive over a 12-month period. We also locked in some of those gains through rebalancing and tactical trades.
We are continuing to monitor markets very closely during this time and will continue to stay in touch. Don’t hesitate to reach out with any questions or concerns.