Video recorded April 14th, 2020. Q&A not available on the replay.

Market Update for Q1 2020

The US stock market (S&P 500) declined 20% during the first quarter; its worst-ever start to a year. The quarter, in our review, was marked by three distinct phases:

• Contentment: from January 1st until February 19th the stock market gradually increased by 4.8% while exhibiting low volatility.

• Dislocation: from February 19th until March 23rd, the market declined by nearly 34%. Very little “worked” during the quickest decline of that magnitude. This was a period when virtually all asset classes declined, and stocks experienced record highs in volatility. Even US Treasury bonds, which are typically viewed as safe-haven, experienced bouts of volatility.

• Repair: from March 23rd until March 31st, in just six trading days, the stock market gained back 15% (which continued after quarter-end). Trading volume decreased from heightened levels and asset classes began to behave more “normal.”

The actions of the US government and the Federal Reserve have been guided by lessons learned from the 2008-09 financial crisis: do whatever is necessary to get through this time period with the least amount of economic damage. More specifically, we believe the guiding principles include evaluating:

• What is required?

• What are the situational events or opportunities?

• What incremental actions could be taken?

We believe these same guiding principles (required, situational, and incremental) appropriately reside within our actions for you. Our focus remains on:

• Uncovering planning opportunities, especially given changes with the new CARES Act

• Maintaining a diversified investment mix, incorporating time periods specific to your financial life

• Staying disciplined, especially during periods of heightened volatility

• Seeking rebalancing opportunities with the intent of expediting portfolio recovery

• Tax-loss swapping, resulting in reduced tax implications moving forward

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