Coronavirus and Your Investment Risk

March 12, 2020

The purpose of this message is to provide an update from Calder & Colegrove Investment Group (CCIG) in terms of our response to the Coronavirus.

During his address to the nation last night, President Trump suspended travel between the United States and Europe. Additionally, through an abundance of caution and through the suggestions of government officials, we want to reduce the chance of so-called “community spread” of the Coronavirus. Therefore, at CCIG, we are going to implement the following steps:

Annual Client Meeting is Cancelled
Typically, in late April, we hold our annual client meeting. We have made the decision to cancel this year’s meeting in the spring. Alternatively, I will be publishing a new article – complete with thoughts on the market and all other items that I planned to address during the annual meeting. We will soon distribute these remarks through all communication methods, including email and blog. And for some clients who prefer paper, we will also compose a letter and send it through the mail.

Phone and Web Conference Calls
Through the remainder of the month of March, we are transitioning to phone and web conference calls with clients. We plan to resume in person meetings in April. But the situation with Coronavirus is fluid. If this effects any meeting that our team has already scheduled, they will contact you personally.

Stock Market Panic
The stock market is enduring a panic – there’s no other way to put it. In a span of just a few weeks, the stock market has declined nearly 25% off of its highs. Although a market correction is a normal event that we expected over time, having it occur in just a manner of a few weeks is quite a gut punch to us all.

Is it Time to Reduce Market Risk?
The panic that is temporarily dominating Wall Street is something that most of our clients, including you, do not share. Now let there be no doubt, the wild swings have certainly hurt portfolio values. But, as you can attest, we take great care to invest your money according to your tolerance for risk. And although the market performance and sensational news reporting are scary, you might be surprised to learn that most of our clients have remained invested – as is.

However, if you are wondering: “Should we make changes?” I promise, you’re not alone. To help, I recommend that we take this opportunity to review your risk tolerance. Here’s a suggested course of action:

  1. Take our short Risk Quiz. It’s easy. But don’t worry, unlike a quiz from your days in school, a low score here is not a failing grade. Rather, it may indicate that we need to consider a change to your portfolio.
  2. When you complete the quiz, we will be notified of your score and we will compare it to the score of your investment portfolio.
  3. If the score of your risk quiz is different than the score of your investment portfolio, we will take action. And if it is aligned, we will let you know that too.
  4. To take your quiz, click through this link or type this address into your web browser: https://www.cornerstonefinancialteam.com/riskalyze/

We think this is a mature way to potentially make changes or to recognize that no changes are required. My goal has always been to make sure your risk is personalized and appropriate. That way, the investment decision-matrix is somewhat removed from the unpredictable short-term swings of the stock market.

If you are curious to see how the risk score of your quiz may translate to portfolio risk, take a look at the chart below.

Risk Score Investment Objective Equities (Risk) Bonds/Cash (Fixed)
80-100 Aggressive Growth 98% 2%
60-79 Growth 80% 20%
40-59 Growth with Income 60% 40%
20-39 Income with Moderate Growth 40% 60%
1-19 Income with Capital Preservation 25% 75%

 

As always, we are here to serve. You may also be encouraged to recognize, that this virus is something that will pass. I’m hoping that a good dose of HotLanta weather, will help spell doom for Coronavirus, so we can get back to our daily routines.

Disclosure
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change. References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

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