The Coronavirus continues to be in the news headlines for two significant reasons. The first is the obvious health implications now that the virus has spread to multiple continents in such a rapid fashion and has entered the United States. Although more than 80% of the cases are considered to include minor to moderate symptoms, it is simply too early to predict the containment and stress on the medical community. The second is what the impact will be on the global economy that has been in late stage recovery for some time now.
Statements for February will look ugly. But in no way does short term volatility change our longer-term allocation for strategic planning. We do not plan on any seismic shifts in the portfolios at this time. The addition of fixed income we have made in your portfolios has created a cushion for downside pressure. We plan to be very selective when we do find an entry point for adding risk assets to your strategy. Typically, when the markets sell off in a violent fashion, the recovery allows for an aggressive rebound.
Our baseline case now assumes 2020 global GDP growth of approximately 2%. This is due to supply chain disruptions and pressure on consumer spending and travel. Our research partners are still anticipating a strong recovery in the second half of the year if Coronavirus containment can occur prior to the 1st quarter finish. We continue to take a neutral position of equities to fixed income and are looking closely at adding opportunities for predictable income.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.