After assessing today’s market drop, I want to now share some thoughts, observations and action plan with you. The Dow’s fall of nearly 365 points was 2.2%. The Nasdaq index fell nearly 3.5%. Essentially all stocks in all sectors closed down. I did see a few holdings “in the green” (up), but very few. It has been a long time since I have heard this, but today an analyst said, “There is no place to hide.” I don’t accept that or agree. Never have. As your investment advisor and portfolio manager, I have held investments in your account that do deliver comfort and clarity in a market such of uncertainty.
Today’s market decline added to the overall downtrend since the start of the year, and has resulted in the major stock indexes rapidly approaching levels not seen since the September market bottom. By now, you may know that the first week of this year was the worst first week to a new year for the Dow ever. It fell 6%. That was largely sparked by concerns over China’s stock market and economy. It fell 10%. The largest European stock market lost about 7%, and the emerging market index dropped nearly 9%.
The plan for this market has been in place and continues to be put to work. Being defensive, the plan includes selective selling of the weakest stocks, (like emerging markets), holding more cash and adding to the alternative investment strategy. This is a risk management approach. We are in a market where the ‘best offense is a good defense.’
As your advisors and stewards of your accounts, we remain confident that both near and long term – our approach will achieve positive results.
Thanks again for your continued trust and confidence.
Sincerely,
John Gardner