We recently conducted a private interview with our advisors. Read what their thoughts are regarding the Financial World, during and after the COVID19 pandemic.
You managed money through 2008. What are you seeing now compared to then?
PHIL: In 2008, we were dealing with a financial banking failure. People were losing their homes and jobs because the system was over leveraged. This is a quite different situation, the hardship that people are experiencing are not due to reckless decisions. Job losses and business failures are due to events beyond one’s control.
MICHELLE: Investors are more educated; we have explained the ups and downs of the markets and they were prepared for our calls to them in March and understood why. Not that it made it any easier for them to accept.
BERNARD: This time it is easier for investors to understand. It is not just a Wall street problem this time. People understand that due to quarantine that most businesses will be negatively affected temporarily.
How are businesses dealing with this?
PHIL: In this climate , there are three types of businesses, those who are calling it quits, the ones that are hunkering down through the storm, and the one who are looking at what opportunities will come out of all of this. The business landscape will certainly change once we are out of this.
MICHELLE: Businesses are reinventing themselves, finding better solutions where they were struggling. This quarantine time has also provided for those businesses to think how they can do things differently.
BERNARD: Businesses that had made the effort to adapt to new tech and new ways of doing things before the crisis are able to continue, sometimes thrive.
How do you think this will play out?
PHIL: I believe we will slowly re open the economy in the next couple of months. Business, and employment growth will be slow into 2021.
MICHELLE: People will be more conscious of their spending. They will save more in case of another pandemic. People will realize family and friends mean the most and possibly continue to make those relationship stronger.
BERNARD: The pandemic will be temporary. How long we do not know but there will be casualties. This is fast forwarding the slow change that we were seeing. For example, my parents never had an Amazon account before, now they have made their first purchases. What was stopping them before?
Who will lead the market post “winter”? How will the new world look?
PHIL: The markets will rotate growth into different sectors. The winners will be technology and health care companies. A lot of other sectors will be challenging. Smart investors will be rewarded but it will take time for the economy to bounce back.
MICHELLE: The tech companies are already in the running. During COVID, they have surged with home office equipment and software. They will be working closely with the Health Sector, which I believe would be second in the running, to invent equipment such as inhalators, testing programs, etc.
BERNARD: It appears that tech companies with innovation are leading the way. Post-corona, many will focus on being prepared for the next pandemic/quarantine. Nobody will want to be caught without enough toilet paper or non-perishable food. Schools will not have to wait to get kids set up online, all teachers will have to know how to navigate an e-classroom. Businesses will all have a contingency plan for how to operate in a quarantine environment.
What is the biggest challenge?
PHIL: How do we deal with all the debt, and employment?
MICHELLE: Biggest challenge – the debt. How will it be repaid? Will our children dealing with this until they retire?
BERNARD: Trying to figure out the scale of change in the post-corona era to determine if there’s value in stocks. For example, will mall shopping rebound to peak traffic or was the trend pre-pandemic already shifting and this is accelerating change?
PHIL: Fear has always been a common thread or emotion during unusual times. It is during these times we should remember what is important — our family and friends. We are going through an adjustment, but the markets have always rebounded over time. New companies will come along and will start businesses we have not even thought of today. I am an optimist; I believe that to increase the worlds standard of living we must give everyone an opportunity to grow. History has provided us many challenges over the centuries, but man has always moved forward. Change is happening faster today, and we will meet these changes with new ideas.
MICHELLE: The World as we knew it – will be no longer. There will be a multitude of changes and challenges going forward for us and for the next generations. However, with every negative there is always a positive. The way we work and the way we do things will and have changed mostly for the better. There are still some challenges for businesses, however with every downturn in the market, as we have seen in the past, there is always an upturn.
BERNARD: We must continue to try to keep a long-term view. In the future, when we look back on the “Corona virus market crash of 2020” we will either look like a genius to have bought stocks or wish that we did.