What we’re doing with our portfolios:
Public health outbreaks and epidemics like the recent coronavirus can quickly scare investors and, eventually, affect economies and businesses. The recent coronavirus outbreak has shut down airports, halted trade, and led to the rapid construction of new hospitals in China. The effects of the outbreak may push China’s economy into a period of slower growth, with stocks trading lower as investors seek protection.
So, what does that mean for the portfolios we run?
- Looking at nine major outbreaks since 1998, there is little evidence linking global epidemics with long-term investment fundamentals.
- The Chinese economy may slow, perhaps even meaningfully, but that is not a reason to invest or divest. Long-term investing is often best disconnected from short-term economic reactions, so we implore investors to maintain their focus on what matters.
- Across the portfolios we run, we do have a relatively small exposure to Chinese assets (both directly and indirectly) but remain confident these holdings will deliver positive outcomes for long-term investors.
Rest assured our portfolio managers are closely monitoring your investments. Please reach out to your advisor with any questions.
PFG Private Wealth Management, LLC