A MESSAGE FROM DELEGATE REGARDING COVID-19

The Importance of Remaining Cautious

Yesterday, the S&P 500 gained 7% on news over the weekend that the spread of the coronavirus had potentially slowed in several U.S. cities. While this is undoubtedly good news, we remain cautious for two primarily economic reasons.

First, even if we assume the spread of the virus is slowing, there’s still no timetable for businesses to reopen. And even when businesses do reopen, there’s no guarantee that consumers will return. Second, the effect of the virtual shutdown of the domestic economy on corporate America is still unknown, and companies have not yet given guidance on how their earnings may be affected. Finally, while the government has done a good job implementing various stimulus programs relatively quickly, it’s unclear whether the amount of stimulus will be enough to stave off a deep recession or even a depression.

The common thread of our reasons to remain cautious is uncertainty, which creates volatility. With so much still unknown, to partially mitigate this volatility, we continue to believe that the prudent thing for investors to do with respect to equities is to dollar-cost average over the next several months toward policy targets.