SUMMARY. As we mentioned in our prior post on the virus, sentiment on economic growth is tracking with the number of virus cases reported in the media. Panic is ensuing which history tells us may not be warranted in that the virus will no doubt effect growth short term, but not permanently. We maintain that once any light is shed on a time table for a stop gap drug to reduce the death rate (more probable) or a vaccine (less probable in near term) for prevention then economic growth expectations will improve. The presence of either may reduce uncertainly despite either being months or quarters away to being marketable.
INVESTMENT IMPACT. The presence of higher than normal cash/bond levels since beginning of the year has allowed us to allocate more to equities this week. We continue to do so with opportunities that present value and high sustainable dividend. We have raised equity levels significantly as result, but still remain below target levels especially in the growth models.
For more insights see our website and disclosures found there at BCA. As always contact us for further explanation of how these events can effect your finances.