Coronavirus cases are spiking and reopenings are being delayed. Texas Gov. Greg Abbott said the state will roll back some of its reopening measures as coronavirus cases and hospitalizations continue to rise. Florida announced it would suspend “on premises consumption” of alcohol at bars in the state after reporting a surge of nearly 9,000 new virus cases. At a nationwide level, the daily average number of confirmed coronavirus cases is now more than 33,000. The Dow closed down 730 points, or 2.8%. The S&P 500 slid 4.2%, and the Nasdaq dropped 2.6% on Friday.
Like a bad horror movie, in the middle of the Corona chaos, Trump is suddenly ramping up trade fights with two of the nation’s biggest trading partners — threatening to slap tariffs on goods like chocolate and butter from Europe, and pushing to reimpose tariffs on aluminum imports from Canada.
What are investors to do now?
Future Wealth’s View
It is time to step back and read. Here is a quote from one of the seminal books ever written on investing – The Intelligent Investor by Benjamin Graham. For those who don’t recognize his name – he was Warren Buffetts’ teacher. In his book, he states – “Professional investment advisors will give you counsel and charge substantial annual fees. The best firms don’t make extravagant claims to brilliance but are careful, conservative and competent with an aim to conserve your principal value and make a conservative return each year. Their main value is they will help shield you from costly mistakes”. And then, he goes on to bash brokerage firms like Schwab, Edward Jones, Morgan Stanley etc. by stating “Advice from brokerage firms – Here, the flaw is that these firms make their money from brokerage commissions, and it is in their interest to get you to buy and sell often. An intelligent investor will readily see they are too aligned with day-to-day marketplace trading to be able to offer any viable long-term investment suggestions.”
This book was written in 1949 and its principles hold even today. At Future Wealth, our priority is capital preservation and with no commissions from any of the trades we make on behalf of our clients, our sole purpose is to take care of our clients’ investments. What are we doing now for clients? Staying conservative and providing downside protection. Our advice to all our readers is to stay away from trying to find the next hot Covid stock. As Yogi Berra once said “No one goes there nowadays, it’s too crowded.”