April 2020

Like a Fish Out of Water

In the water, a fish is graceful, beautiful and in control. But when you land a fish into a boat, it flops around on the bottom of the boat, not knowing what to do next. When it comes to investing during this COVID-19 pandemic, we are all fish out of water.

As investors, we have never seen anything like this. The factors that have caused the Dow to have its worst first quarter in history are not financial in nature. Rather, this market volatility is caused by a worldwide health crisis and the effects of that crisis, from social distancing to unemployment to an overall sense of fear and stress. Yes, it is costing many people growth in their portfolios. But by the time it ends, experts believe, it could cost the lives of hundreds of thousands of Americans, and likely millions of people worldwide. We have never seen anything like this in the markets. But that doesn't mean we are helpless before it.

Our first order of business is to understand the virus, what causes it and how to control it and, ultimately to defeat it. Healthcare workers and scientists around the world are working selflessly and tirelessly to do just that. We all need to do our part, to follow the advice of experts, to be patient as we upend our lives for a bit. Our survival, and the survival of people we love and people we don’t even know, depends on it.

Once we have brought the virus under control, this nation and the rest of the world need to focus on how to bring back the economy. There have been some important steps taken in that direction. We have seen quick responses from the Federal Reserve and the government, bringing down interest rates and providing a series of stimulus laws. But once the health threat subsides, it will be important how the economy comes back online – and how it is changed or unchanged. For example, will more employees want to work from home, and will more companies want to encourage them to do so? And what repercussions will that have on productivity as well as on things like the rental of office space? Are there specific jobs or sectors of the economy that will be profoundly changed or eliminated altogether? Only when we know those answers will we really be able to evaluate things like the proper valuation of the market and what constitutes a new normal for the financial system.

Despite all the challenges we face, we at Peachtree Investment Partners have faith that we eventually will come out on the other side. We have always believed strongly in great U.S. companies, and we continue to be optimistic that those companies and others will make the adjustments that need to be made. Throughout history, our country and our world have faced many and various challenges. Please don’t hesitate to contact us with any questions or concerns. We are here to help you get through this challenge, as we have gotten through so many others – together.

Garry K. Schaefer
Atlanta, Georgia
April 8, 2020

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