It looked like stocks really wanted to go up today, but alas, it appeared that more liquidation was occurring, it was quadruple witching Friday, and basically investors were scared to buy much of anything heading into the weekend. As more and more forced shutdowns occur, the economic fallout is becoming almost impossible to handicap at this point. But, so much of the selling of all assets in times like these- stocks, bonds, gold, etc. stems from firms being leveraged. Leverage causes liquidation and having to sell assets at any price.
The important thing to remember is that investors like us do not use leverage. We are not forced to sell assets at fire sale prices. Indeed, as we have mentioned, our portfolios are set up just so we don’t have to do that. We always have a good portion of our allocation in safe, stable securities which are designed to hold steady in these times. If we need access to capital, we don’t have to sell stocks at the worst time, but instead can tap our stable assets while stocks take time to recover.
But, as mentioned, stocks just couldn’t stay in positive territory and by the afternoon, things began to fall apart once again. By the close, the Dow Jones Industrial Average was down 913 points to finish the day at 19,173. The S&P 500 was down 104 points to close at 2,304. Gold was up $7 to trade at $1,486 per ounce, while oil was down $2.34 to trade at $23.57 per barrel WTI.
It was another brutal week for markets and market participants. Despite the efforts of the Federal Reserve and Congress, we simply need good medical data and information to stem the tide. I know I keep saying it, but it keeps on being true. The Fed has been heroic in their liquidity providing efforts, and Congress will deliver something big soon, but fear and anxiety is what is gripping not only this nation, but the world. As I have continuously said, we will be here for you fighting every day to deliver the best service that we can to you. Keep your spirits high and your loved ones safe.
Try to have a nice weekend everyone