Market Update - April 19, 2020

April 19, 2020

I hope that you and your family are healthy and managing well during this unprecedented time. I want to provide you with another update on how the COVID-19 pandemic has affected financial markets and your portfolios.

As a recap from my previous updates: In reaction to the pandemic social distancing measures and self quarantine measures that have affected a large portion of the world’s population, global capital markets declined sharply throughout March. This will be evident when you look at the Q1 statements you will have already received or will receive shortly.

 

What has happened overall in the markets since the end of March and my last market update?

• The Canadian and US markets have seen a somewhat steady move higher based on increasing confidence that lockdowns worldwide could slowly begin to lift in the near future. Poor economic data out of the US saw a slight pullback, however markets have continued on a relatively stable rise in April putting out positive performance thus far, offsetting some of March’s losses. This has been a good thing for all your portfolios.

What does this mean?

The fact that markets have recovered as much as they have from their lows in March is a good example of the dangers of trying to time making moves in the market rather than staying the course for the long term and following your investment strategy.

Media coverage around COVID-19 continues to be constant with news of increasing infection numbers, loss of employment and lengthy lockdowns, but even through this, North American markets have actually been quite resilient so far in April. There may be several reasons for this, including government stimulus packages, and a hope that economies will soon get to go back to work.

By sticking with our long-term strategy, we have the luxury of benefiting from this unexpected surprise – while those who have pulled their money out of the market must watch a bounce back that they are either not involved in or did not get to take full advantage of. This is not to say that we know the direction the market will take tomorrow or in the coming days and months. In fact, it is exactly for this reason that we stay the course, allowing our plan to ride the waves during the good times and bad.

 

Looking Forward

We have most likely not seen the end of volatility in the market, however the market tends to be somewhat unpredictable, especially in these times. Try not to be discouraged about your short-term investment returns and try to remember why your long-term goals and investment strategies were put into place.

As always, if you have any questions or concerns at all, please do not hesitate to reach out. I want you to feel up to date on your portfolio’s and I hope that these updates offer you some piece of mind and comfort in a time where we have so many unknowns.

Sincerely,

Nicole Rothe BSc, CFP, EPC

Financial Planner, Manulife Securities Investment Services Inc. | Rothe Wealth Management

The opinions expressed are those of the author, Nicole Rothe, and may not necessarily reflect the views of Manulife Securities Investment Services Inc.