The COVID-19 pandemic has rattled the market and put tremendous pressure on investors. VIA IV clients can be assured that they are protected through exceptionally diversified portfolios — which are invested in indexes around the globe. As a result, VIA IV clients are not exposed to the downturn of any specific company that permanently goes out of favor. When markets bounce, indices naturally follow. Single stocks don’t necessarily do the same.
That’s not the case for people who are not diversified. For example, an investor with all their money in restaurant stocks right now would not be a good place due to COVID-19 closures. Furthermore, when the economy recovers, those specific industries might not recover in the same way the overall market does.
We would like to update you on the measures we are taking to continue managing your investments effectively.
While the spread of the coronavirus has had a significant impact on market volatility, markets are designed to handle uncertainty — prices quickly incorporate new information and reflect expectations about a company’s future risks and opportunities, including the potential impact from a viral outbreak.
Our approach is to maintain globally diversified portfolios that are tilted towards factors that exhibit higher returns. We adhere to that approach in all market environments. Remember, we are investing for long-term needs.
Compared to the world of 30 years ago, the road to investing is filled with distractions. Advances in technology have made it possible to be active 24 hours a day, amplifying what’s called a fear of missing out (FOMO) in our lives.
The world is watching with concern the spread of the new coronavirus. The uncertainty is being felt around the globe, and it is unsettling on a human level as well as from the perspective of how markets respond.
At VIA IV, it is a fundamental principle that markets are designed to handle uncertainty, processing information in real-time as it becomes available. We see this happening when markets decline sharply, as they have recently, as well as when they rise. Such declines can be distressing to any investor, but they are also a demonstration that the market is functioning as we would expect.
Below are a few key points to consider. Please contact us with any questions or comments.