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.
As the saying goes, investing in real estate is all about location, location, location. Investing in a globally diversified equity stock market has a similar imperative: Patience, patience, patience.
Returns may or may not come when you want them to come, but successful investors are usually patient people. For example, when the S&P 500 had disappointing returns in the first decade (2000-2009), one would have had a less than zero return, yet that doesn’t mean it was a bad place to invest. Why? Simply put, it’s because we don’t know when the returns for asset classes will happen — but it may not offer any of the immediate gratification we’ve all come to expect in this society.