Watch the CPK Market Action Report: March 2020

A major market sell off starts as the world tries to digest the impact of the coronavirus on the global economy. Did my advice over the last few months to be partially in cash fall on deaf ears?

Watch the full 3-minute Market Action Report now: 

MARCH 2020

In your investing lifetime, you may only see a situation like the recent coronavirus a few times. The truth is that we can’t yet gauge the full economic impact, and by the time we can, the market volatility may have passed. 

In February, the S&P lost 8.4 percent. The Dow Jones Industrial Average, which has heavy international exposure, fell 10.1 percent. The Nasdaq Composite lost 6.4 percent. Demand for bonds was high, and that put pressure on bond yields. The ten-year Treasury yield ended the month at 1.1 percent, a record low.,

In response to the coronavirus, Federal Reserve Chairman Jerome Powell says that Fed officials are prepared to “use our tools and act as appropriate to support the economy.”

Good news about the economy was overshadowed by the outbreak. Companies added 225,000 net new hires in January, blowing past forecasts. Unemployment was just 3.6 percent. The number of people either working or looking for work hit a 7-year high. Retail sales were up 0.3 percent in January, and personal incomes grew 0.6 percent., 

Consumer confidence was strong. The Conference Board’s index topped 130 for a second straight month in February. That hasn’t happened since August.

At the beginning of this year, consensus appeared to be that global economic growth would likely pick up, thanks to the trade deal with China and early signs of a rebound in Europe.

But the question now is, to what degree will the world’s economies be slowed by the coronavirus outbreak?

Investors are expected to watch economic reports out of China and Europe as well as the initial estimate of first-quarter gross domestic product, due at the end of April.

If reports show that COVID-19’s impact was higher than imagined, stock prices may retreat. But if data suggests it was in line with expectations, stocks may respond more positively. 

So, for the month of March, Domestic Equities is still the dominant leader while International Equities has dropped to third place after being replaced by Fixed Income. However, some of my indicators have tripped causing me to increase my CASH position to 50%.   

As for Domestic Equities, I am still allocated to Large Cap Growth, Mid Cap Growth, Small Cap Growth and Large Cap Blend with Technology and Industrials as my two primary sectors of focus.

On the Fixed Income front, I am allocated to US Corporate, Long Duration US Treasuries, US Preferreds & Convertibles and US High Yield.

Although this is my current allocation, this is not a recommendation. I expect a lot of volatility as we work through the Coronavirus issue and it will require an investment plan that is fluid. 

Regardless of what happens next, investors like you need to have a simple and yet solid financial plan that reduces RISKS, COSTS and TAXES while securing the necessary income you need to maintain your lifestyle throughout retirement. 

If you don’t have a plan OR you’re not comfortable with the plan you have, call me today to get pointed in the right direction. 

I’m Chad Kunc and that puts a wrap on the March 2020 Market Action Report. Thanks for joining me. It’s time for me to get back to the markets.

Thanks for joining me. It’s time for me to get back to the markets. And that action starts NOW!

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