As always, our primary consideration is the wellbeing of our clients and their families. In order to slow the spread of the virus, we are working remotely. During this time, phone calls and emails will be answered and any meetings conducted either via phone or using screen sharing software such as Zoom. We have closed our physical office location in Dundas in the interim.
The good news is, we have extensive experience with online processing and communication channels remain open. Business is otherwise operating as normal as possible.
Also of note, the recent market volatility has been extreme and has caused tremendous additional stress during a time in history unlike any other. Just points to consider:
- Market corrections, albeit undesirable, are normal and are caused by all kinds of reasons. There have been 23 corrections in the S&P 500 since the 1987 crash. A stock market correction is defined as a drop from the peak of at least 5%.
- The average market correction in the past 31 years has been 66.9 days. The longest market correction was after the dot-com bubble burst in the year 2000. It lasted for 929 days. There were many factors at play from asset repricing in the technology space, the September 11th, 2001 tragedy and uncertainty over a war with Iraq which elongated this cycle. The shortest correction came in February of 2018. It lasted for 13 days.
- Market corrections rarely turn into bear markets. In fact, there have only been 3 bear markets since the 1987 market crash. Only two of which turned into a recession. Those being the dot-com bubble burst in the year 2000 and the financial crisis in 2008. There have only been 11 recessions post WWII and the frequency has dropped significantly in the past 3 decades which coincides with the deindustrialization of the west.
- Timing the market is close to impossible. In the past 5 years the S&P 500 has posted negative returns in 14 of the months and was positive 46 times. The worst being December of 2018 and the best being January of 2019. Put another way the market was down 23% of the time and up 77%. Observing the chart below it is difficult to find any predictive pattern. However, an investor who stayed invested over the entirety of this period received a 40.38% return.
Lastly and most significant, we encourage everyone to follow the Ontario Ministry of Health guidelines:
- stay home if possible regardless of if you are showing symptoms
- practice social distancing – avoid interactions with other people as much as possible
- wash your hands often with soap and water or alcohol-based hand sanitizer
- sneeze and cough into your sleeve
- avoid touching your eyes, nose or mouth
- avoid contact with people who are sick
We will continue to make decisions in favour of our clients by following the advice of public health officials, and encourage you to do the same. If we all work together, we will come through this very challenging time.
Thank you for your understanding and patience. Stay well, everyone!
Parvesh Benning, President