Remain in the Know

I hope this note finds you and your family well as the COVID-19 virus escalates and alters each of your daily lives. We recognize that the news emanating from this virus has rattled financial markets and increased portfolio volatility in a manner most likely not observed since the Great Recession of 2008-2009. While we certainly cannot shift market sentiment or alter the trajectory of the virus, we remain on call to respond to your concerns, thoughts, and questions.

The emerging impact of the Chinese-born Coronavirus has changed the calculus for investors in a rather abrupt fashion. Over the last week volatility has spiked, equities have corrected approximately 5%, and the dollar has risen along with US Treasury prices and gold bullion. The 30-year Treasury bond is now trading at the lowest yield on record. As the Coronavirus shuts down factories and halts air travel, China’s economy appears to be entering an outright recession after years of mid to high single-digit growth. If the SARS epidemic which struck China in 2002 is any guide, economic demand will rebound in the second half of 2020. However, we do not recommend taking out the fine crystal just yet as there exists no clear indication that this virus will impact the human population and economy in a similar fashion. So where do we go from here?

The US stock market has delivered an average annual return of around 10% since 1926.[1] But short-term results may vary, and in any given period stock returns can be positive, negative, or flat. When setting expectations, it’s helpful to see the range of outcomes experienced by investors historically. For example, how often have the stock market’s annual returns actually aligned with its long-term average?

New York, NY—Clear Harbor Asset Management LLC today announced that Aaron Kennon, the CEO and Co-Founder of the firm, has been named to Forbes Magazine’s 2019 list of Best-In-State Wealth Advisors. “I am thrilled and honored to receive this recognition on behalf of the Clear Harbor team -- particularly from one of the world’s leading financial publications. Each advisor at Clear Harbor is passionate about partnering with our clients on all matters pertaining to their wealth. This award highlights the quality of service and attention to detail that is brought to bear on behalf of our clients each day,” commented Mr. Kennon.

What a difference a month makes. The rosy outlook for corporate America did not fade this month. However, the equity markets both home and abroad faltered over the last five weeks as uncertainty over the sustainability of earnings growth fueled speculation that the equity bull market in the US has run its course. Continued dollar strength and geopolitical uncertainty has weighed on Emerging Markets, a trend that commenced in January of this year. And geopolitical uncertainty from London to Berlin to Rome has weighed on consumer and business optimism in Europe, sending benchmarks markedly lower over the course of the month and year.

For investors, it can be easy to feel overwhelmed by the relentless stream of news about markets. Being bombarded with data and headlines presented as impactful to your financial well-being can evoke strong emotional responses from even the most experienced investors