March 12, 2020

Our Coronavirus Action Plan

Routines are an essential part to daily life. Every animal, human, or otherwise, has a routine to function normally whether it be going to the local coffee shop or hunting for food during certain hours. Prolonged disturbances in these routines may cause panic, chaos, and anxiety. This uncertainty surrounding COVID-19, OPEC, and the Federal Reserve’s latest rate cut is causing market volatility and selloff.

As we have previously mentioned, in the fourth quarter of 2019, the Dowling Group portfolio managers adjusted our client portfolios in anticipation of the coming volatility in the markets. We consider research from top analyst, economic data points, and recommendations from our portfolio managers when we make these portfolio changes.

As Richard Thaler, PhD states in his book Misbehaving: The Making of Behavioral Economics, “Whenever anyone asks me for investment advice, I tell them to buy a diversified portfolio heavily tilted toward stocks, especially if they are young, and then scrupulously avoid reading anything in the newspaper aside from the sports section.”

With that said, here are our insights and action plan:

  1. Stay calm. We have been through market corrections many times in our 41 years as professional money managers. Life will return to normal and the markets will once again go up.
  2. The Dowling Group sees value and opportunity in the market in the near future. We are not ready to buy anything today but when the panic subsides, we will look for opportunity. We will also rebalance appropriately when the dust settles which allows us to bring the portfolios back into their proper allocations while buying discounted stock.
  3. Benjamin Graham, considered to be the father of value investing, and a mentor to Warren Buffet insisted, “Intelligent investors don’t need superior intellect, training or expertise. Instead, intelligence consists of patience, independence and self-control. You don’t have to let Mr. Market do the thinking for you. The true investor scarcely ever is forced to sell his shares, and at all other times he is free to disregard the current price quotation.”
  4. We stay the course during the turbulent times and keep in mind that we try not to be speculative investors. Therefore, sticking to your long-term investment plan that is built to withstand the short-term volatility is crucial at this time. The markets always bounce back. Breathe. Don’t succumb to panic, it is the enemy of investing.
  5. We believe that there will be a “U-Shaped Recovery” that will happen as order is restored and nerves are calmed. Simply put, this is a decline in the markets, followed by a gradual rise back. The market charts resemble a U.

We couldn’t predict that it would be the coronavirus, but we did plan for something like this. We have contingency plans in place to assure business continuity. These include redundant data storage and the ability to work remotely from anywhere. In fact, many of our staff already work from home to some extent.

For now, we intend to continue working primarily from our Greenwich office. We are disinfecting thoroughly and will maintain normal business hours.

As you already know, we have the ability to send and receive documents securely through Dropbox as well as eMoney. We can schedule video conferences and phone meetings if you prefer to stay at home and use our digital data transfer tools. And there is good old fashioned mail if you don’t like any of the other options. Please let us know how we can help to make it as easy as possible for you.

Until the full effect of COVID-19 is known, markets may remain volatile. If you’re feeling unnerved, please give us a call at 203‑967‑2231. We’re happy to talk with you and help you decide on a course of action that is best for you.

Best regards,
Sean M. Dowling, CFP, EA
President, The Dowling Group Wealth Management

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