I wanted to share a good summary from Avantis Investors on the coronavirus and its comparisons to past pandemics, as well as market responses. Here is the link.
Coronaviruses, Pandemics and the World Economy
I have known Eduardo Repetto, one of the authors, for over 12 years. He is Chief Investment Officer at Avantis Investors, and former co-CEO at Dimensional Fund Advisors. The summary is thoughtful and well reasoned.
Here is a link to Eduardo’s bio.
Finally, attached is a deck of an approximation of how different asset allocations performed from November 2007 – February 2009, which was the worst market since the Great Depression. The returns represent the combinations of Dimensional’s 3 global funds, DGEIX (Global Equity Portfolio), DGSIX (Global Allocation 60/40 Portfolio) and DGTSX (Global 25/75 Portfolio). I combined the funds to get an approximate equity allocation for each threshold, and then showed returns (not including Advisor fees) for the time period. Disclosures are at the bottom of the slide. I wanted to give investors a feel of how different portfolio allocations performed in that downturn. The comparisons are for illustrative purposes only.
Downside of Markets and Recoveries from Crisis.
Finally, here is the newsletter we sent out earlier in the week. If you missed it, I encourage you to read it.
McCartney Wealth Management Newsletter – 2/25/2020
If you have any questions, please feel to reach out. You may want to send an email first, and we will then give you a call back ASAP. Call volume has increased slightly. We will obviously get back to clients first.
We definitely have faith in the markets for the long-term, and as we have preached, it is a long-term game. Volatility will be elevated for awhile.
All the best,
Mike and Emily