Coronavirus Market Update

March 19, 2020 – Market Update

Stocks dropped about 6% Wednesday and are now down about 35% from their all-time high level set only one month ago.  The fall has been breathtaking and unprecedented and unsettling, to say the least.  Fear over the extent to which COVID-19 and the actions taken by federal and state governments to combat it’s spread will damage the economy has led to wholesale selling of stocks, many types of bonds, and even gold, traditionally viewed as a safe haven.  It seems apparent that the economy is going into, or is likely already in, a recession.  (The average market decline during recessionary periods happens to be, interestingly, 35%.)

Unfortunately, the hysteria surrounding this pandemic will likely lead to more scary headlines, more selling, and even lower stock prices.  During times like these it is important to try to remain calm, which can admittedly be difficult.  Even those of us who have been in this business a long time and have lived through several market drawdowns and nasty bear markets can grow fearful when it’s happening.  During our investment meeting today, we thought back to the financial crisis, when the global financial system was literally on the brink of collapse and seeing the investment team’s members fear and angst.  Even though the team represented well over 100 years of investment experience, faces looked gray and ashen due to the nonstop negative headlines and the plummeting stock prices and worry for our clients.  It’s easy at those times for even the most experienced professionals to think there is no answer and lose hope. 

But giving up hope is not a strategy.  Eventually the market bottomed, and things got better.  Measures taken by governments around the world allowed the financial system to begin healing, companies did what they do, and the stock market rallied strongly.  Business revenues and earnings started going up, and we had an 11 year economic expansion and stock market boom.  It’s happened numerous times over the last 100 years and will do so again. 

Even in the best of times, stocks are volatile assets.  As the chart below shows, every year since 1980, at some point stocks were in negative territory.  In 30 out of the 40 years though, stocks ended the year with a positive return.  Obviously, the current decline is lower than the -13% shown as of the end of February.  We think the point to keep in mind is that stock market volatility is normal and is simply part of the price investors pay for the higher return stocks provide over time.

COVID-19 will be defeated.  We don’t know how or when, but, if history is any guide, the combination of massive financial resources, and human ingenuity and innovation will solve this problem.  Businesses will re-open and we won’t have to be shut-ins anymore and we will be able to live normal lives again. This is not meant to be flippant, but this too shall pass. 

Meantime, we will help our clients, and our Glenview family, weather this tumultuous period.  These are the times when we add the most value for our clients.  It’s when we can walk side-by-side with them, and each other, to ensure that we make the wisest decisions we can to help all of us come out the other side in the strongest position possible.  Hang in there.  Turn off the news.  Take good care of yourself and each other.  And look forward to a bright future, because it will be. 

To better keep you informed, we posted a letter to our website ( last Friday with comments about COVID-19 and the markets.  You can find it, as well as our other perspective pieces and company news, by clicking on the “Glenview News” tab at the top of our homepage.  And please know we are all 100% focused on helping you navigate these difficult times.  Though many of us are working remotely, we are fully functional and only a phone call away.  If we haven’t reached out yet we will shortly.  Please do not hesitate to call any one of us if you need something or just want to talk.   

As always, thank you for your trust and confidence.

The Glenview Trust Company     


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