6/11/20 CK Bulletin: Did the Stock Market Fall Off a Cliff?

Today looks like March or early April all over again! So far, the DOW, S&P 500 and NASDAQ are all down about 4, 5 and 3% respectively. We are once again looking at losses comparable to March 24th of this year when the DOW dropped over 2,100 points, about 10 days after March 13th when the DOW dropped over 1,900 points. We also witnessed April 6th when the DOW fell over 1,600 points. In each of those cases, the stock market recovered.

Today’s catalysts are the Federal Reserve Bank’s opinion that the economy will take years to recover, combined with a second wave of Coronavirus cases in states such as California, Texas, Florida and the two Carolinas. This created fears that the economy may go back to shut-down mode in some states, setting the stage for the stock market to take profits! And now the profit-taking has turned into a rout.

We do not have a crystal ball to say whether the indices will recover quickly or not; but history shows us that the various indices always recover given enough time. The good news is that your portfolios are designed to minimize the downward drop and benefit from upward movement.

We hope you take comfort in our careful tending to your portfolio.

 

~With care and concern,
from all of us at Colman Knight

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