Maintaining a healthy perspective

While market volatility currently overwhelms the headlines, we think it is important to take a step back and provide perspective on the markets during the current coronavirus (COVID-19) outbreak as it relates to previous epidemics.

As illustrated in the chart below, viral outbreaks have occurred before. Looking at a dozen epidemics since 1980, we see that despite short-term setbacks, market growth has continued, as indicated by the S&P 500® Index.

Combating the epidemics

S&P 500 Index, January 1980 – March 2020

S&P 5000 Chart

Source: S&P 500 Index.

What this means for investors

It is important for investors to see these events in perspective with others in history. While immediate market reaction seems drastic, recovery isn't far off, in our view. On average, the S&P 500 Index posted a gain of 8.46% six months following these outbreaks.

Nothing presented should be construed as a recommendation to purchase or sell any security or follow any investment technique or strategy.

The views expressed represent the investment team's assessment of the market environment as of March 2020 and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice.

Past performance does not guarantee future results.

Investing involves risk, including the possible loss of principal.

Market risk is the risk that all or a majority of the securities in a certain market – like the stock market or bond market – will decline in value because of factors such as adverse political or economic conditions, future expectations, investor confidence, or heavy institutional selling

The S&P 500 Index measures the performance of 500 mostly large-cap stocks weighted by market value, and is often used to represent performance of the US stock market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

All third-party marks cited are the property of their respective owners.

Diversification may not protect against market risk.

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