03/16/2020
As you are well aware by now, we are living through unprecedented events. Events that clearly have uncertainty, have no easy solutions, and which the stock and bond markets do not like. We’ve lived, and prospered, through unprecedented events before, likely will through this one, and we will face events like these in the future. There is no way around it, we must go through it, but perspective and historical look backs can provide some comfort as we’re in the throes of uncertainty.
In the last few days I came across an article from the Federal Reserve Bank of St. Louis, published on October 1, 2002. One year and twenty-one days after September 11, 2001. A quote from that article is below.
Risk and uncertainty are two concepts that stem from randomness. Neither is fully understood. Although risk is quantifiable, uncertainty is not. Rather, uncertainty arises from imperfect knowledge about the way the world behaves. Most importantly, uncertainty relates to the questions of how to deal with the unprecedented, and whether the world will behave tomorrow in the way it has behaved in the past.1
There’s the rub; will the world behave tomorrow in the way it has in the past? I believe it will, but it takes time and within that “time” we will experience volatility, uncertainty, and at points question our sanity. But we will get through it.
My career began in 1998. Here are the epidemics we’ve seen since.
SARS April 2003
Avian (Bird) Flu June 2006
Dengue Fever September 2006
H1N1 (Swine Flu) April 2009
Cholera November 2010
MERS May 2013
Ebola March 2014
Measles December 2014
Zika January 2016
Measles June 2019
In this period we’ve also seen the Dot.com bubble, September 11th, war, The Great Recession, natural disasters, and more. We’ve gotten through them all and usually we forget how we felt in those exact moments, the fear subsides, and we’re happy we didn’t panic as it relates to our financial portfolios, or otherwise.
I can say this with certainty; I don’t know how long this will last. I don’t know what the interim will look like, but I expect volatility, both up and down. I expect that some days will be worse than others and I expect that it will cause stress, for you and for me. I also expect that the sun will come up tomorrow and I expect that spring will be here to ease the burden of quarantine. I expect that eventually things will be better and people and markets will begin to behave as they have in the past.
All of my clients have tasked me with being a leader. A leader in helping them plan, a leader in helping them design portfolios, a leader in helping them make difficult decisions. I am incredibly thankful and proud that you’ve chosen me to help you. I will lead you through this, I wouldn’t ask you to do anything I’m not doing myself, and I’ll be here as always providing the value you need from me.
We will get through this, it will take time, and I’ll be here with you for all of it.
As always, please call or email with questions, concerns, or for an appointment. I’ll be available, although won’t be taking in-person meetings for the foreseeable future.
Yours in government imposed quarantine,
John R. Crane, CFP®
https://www.stlouisfed.org/publications/inside-the-vault/fall-2002/the-stock-market-risk-vs-uncertainty
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