It has been nearly three months since our first Covid-19 update in early March letting you know how we were reacting as a firm and the ways, if any, we were adjusting our investment strategy and outlook. Our mantra throughout was that we would make few changes to our stock and bond holdings outside of trimming a few debt-heavy positions. We encouraged clients to stick with their long-term allocations and avoid modifying them amidst a developing and volatile situation. As a result, most have seen their portfolios recover nicely. Clients who have been willing to view their portfolios over even longer time periods (e.g. three years, five years, or longer) see that this is a relative blip on the performance radar.
As of this writing, the S&P 500 is down just 2.6% year to date after a nearly 40% recovery from its low on March 23rd. However, we view now as a time for very cautious market optimism. Despite the market’s strong recent performance and the economy re-opening to various degrees across the U.S., we have not let down our guard as pertains to the investment impacts of the economic and public health crises. Though we recognize the function of markets as discounting all available information, thus reflecting investors’ positive expectations of the future, the fact that 40 million U.S. workers have filed initial jobless claims cannot be ignored from an investment standpoint any more than recognizing the human toll that represents.
Our job is first and foremost to take care of your money. Money you have all worked so hard to acquire and have entrusted us to preserve and grow. No doubt there are many clients sensing the gravity of our moment in time right now. We at NWIC also are keenly aware of the sensitivity of trying to convey market and portfolio performance against the backdrop of unrest. We take both our job and the need to recognize major societal events very seriously. Recently, many leaders have expressed the need for our country to listen right now. We agree and we are listening.