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Manage the Funds Podcast

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COVID-19 Market Update


Henry+Horne Wealth Management President Michael Carlin discusses the coronavirus impact on the economy and your finances, and where we go from here.

I took the time to record a special podcast specifically related to COVID-19, the stock market, the economy and what we were doing to help evolve client portfolios. It was and continues to be a very trying time economically. I thought it was a terrific opportunity to take a minute, breathe, pause and then share how we were taking clients through this really difficult time and the type of portfolio positioning you needed to evolve your own portfolio and other questions that you might have. Maybe this podcast can answer that. If we didn’t, certainly don’t hesitate to reach out to us at anytime. You can follow us at Manage the Funds. That’s our social media handle. Or you can always find us on the web at managethefunds.com. I hope you enjoy the podcast. Take care and have a terrific day. Enjoy.

Hi everyone. This is Michael Carlin, president of Henry+Horne Wealth Management. I wanted to make sure that I set aside a bunch of time the way that I normally would when I typically sit down with clients and go through the State of the Union. Where we are now, where your portfolio is and essentially what we are looking to do to navigate the situation going forward.

So this is for free. Those of you that have been clients of mine for a long time, this is going to feel very similar to what a regular meeting is, I hope, other than the fact that I’m wearing a more comfortable t shirt, and I’m working from home. So excuse the casualness. This has been a very unusual time. I know that many of you are aware of what’s going on right now in the market. We have gotten more calls and e-mails than ever before, certainly even inclusive of 2008. We understand that there is a sense of unrest with this situation that is concerning in a typical market is. Capturing that expression very well in its most recent performance. So I’ve gone through and spent a number of days aggregating slides and data the way that I normally would to put context around what’s going on right now. And I’m going to weave it through exactly what we are doing to the portfolios.

Many of you see some of those changes that we’ve made today. And I’ll explain context as to why we’re doing it which hopefully will make sense moving forward.

So the volatility in this particular stock market has been something that has never been seen before. And today, Monday, we saw yet another day of historically massive performance and volatility. The volatility is so great, in fact, that it is more volatile price wise than it was even during the financial crisis. We haven’t seen this kind of volatility ever. The last traders to have seen it will be those that were working during the Great Depression. And the amount of volatility we’re seeing right now is even greater than what we’re seeing during the Great Depression.

That should provide a sobering moment for everyone listening. The amount of concern that your feeling is accurately being reflected in the uncertainty in the stock market. So in the span of three trading days for March you can see the S&P 500 had its 7th worst day on record. Massive volatility. But look at this from a historical standpoint. Look at it here where you’re seeing the daily downside in the daily upside. Have you seen these kind of numbers? Yes. This is the day the market went down 22%. 1987. By the way, that coincides to the day that I first started buying stocks.

If you look back historically, we didn’t see these kind of down days. Even back in the Depression. We haven’t seen down days like this since that 1987 correction, it’s been an incredibly bizarre time.

So the big picture. The volatility is massive. The volatility is real. It is expensive. Let’s talk about the reason why. It certainly has everything to do with the COVID- 19 virus and the shutdowns that we’re experiencing right now. We haven’t seen this kind of shutdown ever and we don’t know what to expect. The economic shock we’re going to be feeling the full brunt of in the second quarter of 2020. Remember the first quarter, 2020, January was normal, February was normal. The market was up most of the month of February. It’s really in this month that we’re seeing this massive sell off. And then what is April and May going to look like? We’ll talk about some of those expectations.

But we first need to share a little bit about what we think the virus is up to. So many people look at the Chinese data with some skepticism but if you look at the Chinese cases, they really level off very notably here in the month of February. You see it’s a flat line, in fact. If you listen to some of those reports in China, they state that the only new cases they have for people that are coming into China. You’re seeing the US cases which are really ramping up. And that’s the concern. The concern is, is that what that slope going to look like? So the active cases that are roughly 30 days from acceleration to lockdown. So this is the best way that we’re aware of to give you a sense for how long this is going to last.

And again, so some people don’t trust the Chinese numbers which are here. This is from the WHO CDC data mapped out. And so that you can see the new cases are dropping precipitously in China. They also are doing so the same in South Korea. Now, many people do not have skepticism of the South Korean numbers. Chinese numbers maybe. But South Korean numbers they don’t yet, at the same time, many people point to South Korea saying yeah, but they really locking things down. We’re not doing the same thing here. So they say, well, gee, are we doing better than Italy? Here is in gray and our cases were for a little while behind or really matching Italy. We’re seeing a little bit of a spike here. These next couple of weeks are going to be really important to see exactly what our results look like compared to Italy, because it’s starting to look like Italy’s cases are topping out.

And you’re seeing the fact that Italy’s case is topping out. And we’re having a horrendous week last week with the stock market. Italy’s market did significantly better than ours because the rate of cases has slowed. It still went down, but didn’t go down anywhere near as much as the US market. So what this chart is indicative of is that we are a week or two away from really understanding likely what the peak case looks like. And if we continue with this, you know, relative lock down that we are experiencing here in this country, then the expectation is that you’ll see a gradual decrease.

And that’s the kind of thing that the market would look very favorably upon. So what does that mean? Does that mean that we’re out of the woods yet? You know, not obviously and not necessarily but it helps to put this market correction in context and this likely recession that we’re in in context as well. So let’s start to take a look at this, this rapid sell off and then figure out where it is, historically speaking, to gain a greater sense for whether or not we’re gonna see, you know, what we’re gonna see in the coming weeks and months ahead.

This, again, also helps us figure out what we’re gonna be doing with portfolios. You know, I really get the hang of this. This is good stuff. OK.

So the ten best and ten worst one day percentage moves. So let’s let’s look at the the graphic information here on the left. And this is the largest one day gains you can see. We had one of those last week. Market was up 9.3%. What did the market do the next week? Terrible. So can we gain any understanding by looking at the one day chant largest one day changes and how the market’s going to perform the next week?

Now, not necessarily. In fact, if we do that, it looks like the average is a negative rate of return, not very encouraging. If you go to the right hand side, what you’ll see is that we’ve had two of the ten worst individual days in stock market history last week. And if you look at that in where we are historically, you can see that when you get these huge numbers that could be a sign that  things are coming to an end.

Let me describe what that means when things are washing out. It means that you have a number of people that are capitulating, giving up, selling their shares, and there are people that are buying it for a price that they think makes sense. This process of finding new owners and getting rid of the original owners is super healthy because at some point everybody that wants to sell sells and that people who now own the these stocks or, you know, different investments in the market now own it at a price that they like. That’s the natural cycle of things. And that’s what has to happen. So that that looks good. That makes some sense.

Let’s take things a step further here. And not only are we having this problem with the market, we’re also having this problem with oil as well. And oil is a particularly big issue. Look at this chart, though. The decimation of oil prices and that’s really what it is, a decimation. It’s under $20 a barrel to close out the week. That’s half of its average price going back to 1983. Wow. And I thought this is an interesting anecdote. But at some point during the week, there were analysts that thought that the price at this rate could go negative. I understand that if you continue to pump oil and no one wants it. Where does it go? It just sits in oil tankers in some cases, and we saw that in 2008. And you see it during certain market cycles where too much oil is being produced. That’s essentially what’s happening right now. There’s just not enough energy consumption as economies are slowing down. But the degree to which the oil prices have gone down has caused a huge amount of problems for all different energy companies. So much so that many pipeline companies are down 60, 70, 80 percent.

Huge, awful, terrible. If you’re looking at, you know, big oil and energy conglomerates. Those stocks are also down significantly as well. 40 and 50 percent plus. It’s hard to imagine that those energy companies are going to come back without some type of resurgence in the price of oil. So you guys know that we we have views and many of you who are watching this. We’ve used w.h Reeves as an energy specialist when we felt like that was the right place in the market to be.

Should we feel like energy makes sense at some point or we feel like that part of the market’s washed out? That would be the kind of energy that we would look to implement in everyone’s portfolios. And we buy the mutual fund again. But unfortunately, we’re not quite there yet. We don’t feel like we’re in a place where we know who the winners and losers of the energy market are going to be. So it is not a holding that we’re gonna be exploring at this time.

You know, if you take a look again at the broader market about, you know, these draw downs, this chart says it all. With this chart shows us is that. And by the way, this is through Fridays. This is automatically old news. The market’s down just about 35% from its all time high in the market. I’m talking about the S&P 500. That’s where we are now. The previous market correction that we experienced was in 2008, down 56 %, peak to trough.

49% when the dot com bubble burst. 48%. We had the energy crisis in 1970 and then we had the depression. When the market was down 86%. So let’s talk for a second about how this differs. COVID-19 situation is very different. And it is both bleak and concerning on a lot of levels. So it’s early in this process. But what we see that looks like it is a form of green shoots and green shoots.

You know, I know it’s a little early to say that is that much in China has gone back online and. You might think, well. Yeah, but you know, the Chinese do things a little bit differently than we do, and that may be true, but 90 percent of Starbucks being open certainly is is a cause for some level of excitement. It is the kind of thing that we look at and say, you know, there seems to be a growing, perhaps definable beginning, an end to this process.

Now we’re getting a sense for roughly how long it is. And we’re going to try to figure out can the market and the economy really can the economy sustain itself over these next couple of months? Because this is different than a financial crisis. We don’t have a banking crisis at the moment. At the moment, banks are really well capitalized. We understand that there is a potential domino effect of. People not paying their mortgages because they don’t have jobs.

Businesses not paying their their notes on their buildings because they don’t have any revenue or income. We understand that there’s dominos there. That falls back to the banks and their balance sheets. What we’re seeing is we’re seeing real direct government intervention to help mitigate what that looks like. And we’ve also seen financial stocks which are down more than 40 percent on balance. Already start to reflect these two thousand eight like circumstances. So it’s a good point just to reiterate that the market looks forward.

The market is thinking nine months out, the market market’s not reacting to something today. They’re reacting to the future. They’re reacting to things that haven’t happened yet in anything that happens. That is that is positive. We’ll hopefully then impact the market positively. It’s different than what the market already feels because there’s a lot of concern and there’s a lot of angst and anxiety that’s going on with the market right now. And that’s being felt in all areas of the market.

Let’s look at some other areas. Let’s break it down here. Those energy conglomerates and this again is as of last week. It’s down a little bit more now. Energy pipelines down 54 percent if you own MLP. We certainly didn’t put them there. So. So you may want to. You certainly want to get out of those or or look to to harvest losses and maybe reposition it to something else. But look around. Look at the small cap stocks, micro cap stocks down more than 40 percent.

Merging market stocks down a lot. And there’s also a lot of issues with the amount of emerging market debt that suddenly is sitting on their balance sheets, which is concerning. So you look around and and there just isn’t much that doesn’t have this read in their municipal bonds down seventeen point eight percent. Those are the high yields and then the regular meetings down seven and a half percent. It’s been a really interesting, bizarre, difficult year for most asset classes and we position client portfolios.

In such a way where. We are using municipal bonds as a safe haven tool. And if you look from January 1st, all the way through the beginning of March, municipal bonds are working exactly the way that we thought they would and way they historically have. As long as there’s no risk or fear that there’s going to be municipalities that are going bankrupt, we look at it and they look and say, well, you know, all systems go, this is a in terms of quality, a type of bond that second only in only next to, you know, treasuries, for example.

And it’s the kind of thing a lot of those bonds that if there’s water and there’s electricity, then those bonds are going to get paid. And if you’re worried about your municipal bonds defaulting. You’ve got a lot of other problems. Specifically the fact that, I mean, do you think that your water is going to stop or to hit your energy is going to stop. And if those kinds of things happen, what does that mean for the economy in general?

So the point is we feel great about municipal bonds. We see these discounts of the kind of discounts that we haven’t seen since 2010. Massive sell offs and opportunity for us to be buying bonds with both hands. So it’s interesting is we’re really trying to do two things at once. Number one is we would love to sell some of our municipal bonds at a fair price and be buying stocks with them. Wouldn’t that be perfect? Because that’s exactly what we wanted to do.

At the same time, we would love to be acquiring more municipal bonds because, my goodness, the valuations are amazing. And we believe that the type of bonds that we’d be buying now if we bought them now and we held them from now till things started to normalize, we think there’s, you know, anywhere between a five to eight to 10 percent or more natural appreciation in the price of municipal bonds plus the tax free interest. That’s the kind of thing that we’re looking for so many times many of you will ask me.

I have some extra money. Is now a good time for me to be investing in historically to each and every one of you? I said, no, nothing, nothing worth looking at. So. Municipal bonds. If nothing else that we’re not we could be buying right now are the kind of things that we feel really good about. Really strong and the kind of things that were to use a term were buying with both hands. We talked a little bit about the market dropping, but I think you think you’ll like this chart.

I mean, like it, you won’t like it, but it it’s good information. The 30 days to be the market to fall, 30 percent is the fastest ever. So we’re trying to figure out whether or not you know as well how fast. I think the best way to show you is on graph and how much longer could this go on? And there’s a few different ways I’ve broken this down. This is one. And if you look here, this this part of the chart shows you how quickly this drop has happened.

And you can see right now. Right now, as of today, we’re down here. So we are almost equal to the market crash of 1987, which took significantly longer. So here’s the thing. You’re going to hear and see a lot out there that is going to say, oh, well, you know, this race is far from over and people are programmed to say that because they’re looking at other 30 percent corrections and saying, oh, well, when you get a 30 percent correction, it takes a long time to online.

Well, historically in these cases, it has. Unless you mean in eighty seven where you know, it didn’t take all that long. It took you know, it was under 100 hundred days to get that total correction done and out of the way. And there were other issues at play at that time. We’ve never had a correction like this. We’ve never had an economic situation roll out because of a virus quite like this. So there’s nothing that we can really compare to safely other than to say that.

This chart helps us begin to understand, my goodness, how quickly this happened and how quickly things unwound. Again, the question becomes, where’s market going to go next? You know, I would I would show you this, show me, show you this show. This is pretty good, too. So. We’re taking a look at the market one week, three months, six months and a year after the market fell. So there is a market fell 30 percent.

So you got the nineteen twenty nine nineteen sixty eight, seventy three. These are all the 30 percent corrections I’ve shown them now in a couple of slides. So maybe they’re getting used to seeing them. But if you look you know, the average six month return. After the market’s fallen, 30 percent is is is +3. The average market return a year later is 6.9. Now, I know when the dot.com bubble burst, it wasn’t over yet, but the financial crisis a year later, it was really almost over.

But remember, with the financial crisis, there was a little bit different. Let’s talk about the different that’s super important. During the financial crisis, we were getting more and more information. It was kind of being revealed. We didn’t know the extent of the problem. We didn’t know the extent of the. I going to call it contagion within banks and the overleveraging that unwound. And as that new information came out, it was zero, 10 percent down 10 in the 20.

And it just took a long time, a long enough time for that information to come through. This is all very concentrated. So if we can get in, see that there’s some kind of government intervention to stem. Some other massive and major fallout. Then the thought is that we will be able to get through this situation faster than we did before. If you remember. During the financial crisis, it really wasn’t until the Fed and the government worked together in tandem where we were able to put that bottom in place.

It hasn’t happened yet as of today, but the House and the Senate have both fought, put forth plans now to put two to two and a half trillion dollars into our economy. If you look at the two to two and a half trillion dollars in terms of its size, it’s 10 percent of our total economy in size. If you add to that with the Federal Reserve is doing it, we’ll hit a little bit more on that as well. You’re looking at a total impact of greater than likely 4 trillion dollars impact in a short period of time driven to our economy at one time.

With a short term situation that we’re facing, so. We’ve never seen a situation like this. We’ve never seen a positive potential impact like that either. So we tend to look at that situation as one of. You know, maybe this is something that’s going to look and feel and act different because we are getting significant government intervention. And when you’re trying to compare this to other market downturns and 30 percent corrections. This this breaks it down again. This is again.

Got the depression here and then you followed by the early 70s and all the different 30 percent corrections that how long it took to fully recover the red. Shows you 30 percent some cut, sometimes a little flick a little bit longer. Sometimes a little bit shorter. But when you can see is is that in some cases you’re you’re going to get a little bit more of a downward pull and then a bounce in a downward poll.

But you’re getting a real good chunk of the downside out in each and every one of these cases. 2007, mind you, it took a long time for the government intervention to come and step in and provide stability to our economy. So. That took some time. We’re certainly putting the trying to put the stop and the bottom on this thing much, much quicker, which again, hopefully will will will work in our favor. Because you’re looking at parts of our economy like here, you know, these small cap names.

Look at this. There have been a few different times where the small cap names have been down more than 40 percent where this red line is. But one was the financial crisis. The other was after. You know, again, the dot.com bubble burst. But really, you almost never see opportunities to buy into this asset class at a rate that’s so at a rate that so low. Could it get worse? I’m not here to say the absolute bottom.

I hope that it is. So as of today, we’ve started to move and reduce some of our large cap U.S. positions that we have. For most of our clients and slowly start to buy the small and mid-cap ETF, buying individual small cap and mid-cap companies is something that we could do. But it hasn’t necessarily always proven to be more successful than just buying the indexes. And we feel really good about buying into in small portions. Some of these indexes now start to accumulate a larger position.

Obviously, if this was the absolute bottom, then we may not be buying anymore. Wouldn’t that be? Wouldn’t that be neat? But it’s likely going to be the kind of thing they’re going to slowly look to accumulate more of. Over time. We’re going to switch gears and talk about the job market. The job market. Sorry. Sorry. The job market. The job market is one that is, you know, certainly it deserves some attention because.

We don’t exactly know. How deep this recession is going to go. By the way, I think that I if I haven’t said to you, I don’t think I have, that we’re in a recession today. The job market is going to give us some shocking sort, shockingly awful information. It’s going to have data that is going to be the very worst data that we have in recorded history. So we know all that the market knows all about its pricing in now, which is why the markets part of the reason why the market’s down so much.

So let’s look at a couple of slides that show us a little bit about what to expect there. Initial jobless claims jumped seventy thousand. That is that is. New and that is not great, but that is just it isn’t even really the tip of the iceberg. It’s just very, very extreme top edge. Look at the chart down below on the bottom, right. What it shows is the Google search trends for unemployment benefits. And Google searching doesn’t necessarily lie.

And if you look at where the red dot, which the national claims implied and what we’re getting from 15 different states in the Orange Square where we’ve already seen some claims start to come in. You could you could take this unemployment data back as far as you want, but it’s going to be a massive number when it come when it starts to come through. You know, there is going to be certain economies that are hurt worse than others. But, you know, you’re looking at millions of people hitting the unemployment market at one time.

We’ve had clients that have laid off significant numbers of people in a very short period of time. And, you know, goodness. You know, we’re sensitive to that and we are aware that it’s happening. But at the same time, the government is aware that this is happening too, and they’re trying to provide a safety net both in real financial compensation. And know, again, improved unemployment coverage. And they want to make sure that their businesses are up and running so that when this thing does resolve that there is a job for people to go back to.

So the Fed’s done a lot, just too much for me to go over everything in the gut in the government’s trying to do more. We’ve touched on a little bit. But let me just share with you some of the things on this list. Look at this. Look, if it is for monetary policy and fiscal policy. You know, they were they moved rates to zero, which, you know, they’re increasing buybacks. But again today, bond buybacks.

But again today, the Fed came out and said, you know, we are we have an unlimited balance sheet and we’re gonna do what we can and we’re going to be buying. We’re gonna be buying mortgages. We’re gonna be buying treasuries. We’re going to be buying munis as well. So you saw in corporate bonds. So you saw corporate bonds. That that index, it’s usually one of the most liquid investments that exists. Corporate bonds are down 16 percent today.

It was up 7 just on the news of what the Fed was doing. That’s the kind of relief that the Fed has taken. They did it. The Fed did not act alone. They had to get blessings from the Treasury. They did so. And when you look at all of these different things that they’re doing, they’re going to be doing, you know, they want to be doing direct lending, all of the different measures and and support activities is incredibly supportive to our market and the degree to which that they’re doing it in the trillions.

You can’t underscore the positive impact that that has on on the markets to provide calm, instability. And you can underscore the impact that that will have on your portfolio, which gives us the confidence to take small steps forward. What would give us greater confidence is that the federal government starts doing the right thing. And so there’s a saying that goes a little bit like when people are panicking, that’s you know, that’s the time where, you know, the stock goes down.

Stocks tend to do well once the government starts panicking and the government because once the government starts panicking, they typically will do something to provide some kind of relief. And that’s essentially what is hopefully going to happen here over the next day or two. And we expect to see hopefully would be the best case scenario be a bottoming. Of the market. And then we would expect to see we’re laser focused on the COVID-19 results. We’re laser focused on the implementation of what the government is putting in making sure businesses stay solvent and in have things moving forward.

So it’s one thing for this to be happening just here with our Fed. But look at what’s happening across the world, what’s happening across the world. You know, Australia, Brazil, Canada, China, EU, you name it, they are all coordinated, acting together. So. We’re trying to find these kind of green shoots. These these small elements that are going to provide us a backdrop that things are moving in the right direction, but look at the way the world is throwing money at this situation.

And they’re not delaying right now as of when this was taken and this is, what, March 19, that’s old news. Was that Thursday? Yeah. So that was 3 percent of worldwide GDP being put back into the economy. Just for just at that time, that doesn’t include what the Fed is going to be doing today and what hopefully Congress is going to figure out here within the next couple of days for additional bailout. So watch that news.

And specifically, just you don’t just take our word for it, but understand that, you know, David Tepper and many other of the largest multi-billion dollar investors in the world, they’re all waiting for the same thing. We’re all waiting for that green flag to wave. That’s one of the things that we’re waiting for to start putting a bottom into this market. Because what you’re starting to see as poor estimates are scary. Let me show you. There are two hundred and ninety one quarters where the government’s reported its GDP.

You know how much the economy is growing. Since 1950, in 14 percent of the time we had declines, which isn’t all that often, but a decline greater than 5 percent. Almost, you know, almost never happens, but we did have one in 2008. But here I you just before we get to the chart on the upper right, let’s look at on the bottom left. How many times you see a particular red line quarter where it was greater than 5 percent?

We did have some, but this goes back to 1950. But it’s very, very, very rare. Now let’s take a look at this chart overhead. Can you believe that Goldman Sachs had the nerve to come out and say that they think that the US economy is going to shrink by 24 percent in the second quarter? Wow. Bank of America. Negative twelve. If you look at the estimates in aggregate, it’s somewhere between negative 5 to negative 10.

I’m just surprised that Bank of America and Goldman Sachs are coming out to say negative twenty four to negative twelve. Those are those are massive numbers. I wonder if if I say f as if it’s going to happen. But if there is some of a government bailout, if they’ll end up changing those figures, if they end up revolving that information to say that, you know, maybe, you know, maybe because of this government intervention or what the Fed is doing, that it’s maybe negative 7, that’s a long way for Goldman Sachs to reach.

But but it’s likely that they haven’t fully embraced what is come down the road because as of the time when they made those projections, the Fed hadn’t done what they did to the fullest extent in the government, hadn’t done anything. So. The question is, is that will it work? What do I do? And some of you have seen this chart and show you again. It’s worth showing you twice. I can take I could take any 15 or 20 year period of time that’s gonna say the same thing.

If you look re-invested from 1995 to the year 2020. You would have endured the dot com bubble bursting. You would have endured the financial crisis. You’d have endured that negative 20 percent fourth quarter in 2018, you would have also endured a good chunk of this downturn as well. If you had owned just the regular S&P 500 index throughout that whole time without selling it or moving at your rate of return on an annual basis would be seven point three percent.

It’s pretty good. But if you take out the 30 best days. Over that 15 year window. Because you’re going to get out now and I’ll get back in when things look better and I miss. I can’t tell you how many times people have been saying that to me. Why can’t we just sell now and then we’ll get back in when things get better? Because I don’t know when those days are just missing the best 30 days. Takes your rate of return from an average annual seven point three to a half a percent, which is even less than inflation.

So you’re guaranteed losing money, let alone the fact you’ve got to pay some tax on that. So after taxes, after inflation, your net net losing money. There’s no point for even investing in stocks at all. So I don’t know when those 30 best days are. I don’t know, it could be tomorrow. So the government could announce a deal tonight or one day this week and the market’s up fifteen hundred points. Two thousand points? I don’t know.

You don’t know? No one knows. I. But I do know this. You have to have some element of staying invested if you’re going to invest in stocks at all. And I’m saying you have to invest in stocks. There’s plenty of upside opportunity in municipal bonds right now. But if you are looking for long term growth, if you are looking for exceptional returns over a long period of time, what the market’s doing right now is no different than what it normally does.

It goes through cycles of massive expansion. And then there’s something that happens that creates this bust. And in this case, it’s COVID-19. So what will happen in this process is that there will be some things that don’t get bailed out and don’t get rescued. Maybe it’s Pier One imports and maybe it’s it’s the final death blow for Sears in J.C. Penney’s. I don’t know. I find it very unlikely that those folks will be bailed out. And I find it very unlikely that those folks have the financial wherewithal to continue going with no to no to low sales.

So maybe this is the thing that puts pushes Macy’s, which is under 5 bucks a share to zero. So I’m not saying that this doesn’t have its winners and losers. This economic evolution that we’re experiencing right at this moment. We’re gonna try to avoid some of those. And which is exactly why we’re not right now invested in energy heavily in focus on energy and oil and things like that. We’re trying to be balanced and we’re trying to be be poised with this and we’re again.

Broad strokes is we are slowly finding liquidity where we can in some cases for some of our clients, we’ve been able to sell some municipal bonds at small losses or no losses at all. Then we’re gonna use some of those dollars to redeploy into the market starting tomorrow. Some of the moves we’ve done today, you may have seen that we’ve made some of those sales over the past couple weeks. We’ve been preparing for this. Again, you’re going to see the entrance of more small cap and mid-cap indexes.

We’re going to have, you know, again, continued focus on trying to find the right type of single stock positions that make sense in the economy moving forward. It’s important to note that we’re not calling an absolute bottom here. It would be great if it was. But we do know that a lot of the downsides been priced in. I don’t know if it’s another 5 or 10 percent lower from here. A lot of it depends on the government plan and the implementation of the government plan and what the Fed’s going to do and how they’re going to implement that as well.

But assuming those things go well, this may indeed be the absolute bottom in for as quickly as we went down. Most of those economists that we read that we respect tend to believe that we’re going to have this U-shaped recovery. I think they want to say it’s straight down, straight up, but no one’s that brave, particularly because we don’t know how the government plans are going to be implemented. Wouldn’t it be magic if the government is able to keep it solvent, the vast majority of all employers, so that, again, when people could go back to work, had a company to go back to?

We certainly hope that’s the case. There’s lots of stuff that we that we’re looking to buy on individual names. Again, I’m happy to share this this in this chart, this information with you. Some of the things are covered, covered, friendly. Some of these things are dividend driven, dividend aristocrats. And, you know, we’re really. We’re really hopeful that, you know, again, working closely with you, your families, making sure that your financial plans are up to date and are financially sound. It’s something that we all want to revisit. So here’s what I I’m kind of encouraging. If you have additional liquidity, this is the kind of market that we want to be buying into. This is the kind of thing you say, well, I have the extra hundred. I’m going to go ahead was put some of that cash and capital to work if we want to go conservative ogo municipal bonds. There’s certainly plenty of equities both on the large cap individual side or the mid and small size with the indexes that we can use.

And certainly don’t hesitate to ask questions I know a lot of you weren’t, and most of your e-mail start with. I’m sure things are crazy right now and they are. But but for us, this is what we do and we love what we do. So with that, certainly, go ahead, fire away. Ask us equidae questions that you want. Be sure to follow us on at manage the funds. And I say that not to be self-serving, but we put out a lot about what what we’re doing and why we’re doing it and what we’re seeing and what we’re reading.

So if you go to anything like your Facebook or Twitter or Instagram, whatever you like and go to manage the funds, we’ve got a lot of content there that we’re putting out on a fresh basis. So it helps keep you in touch with us. So that’s what I got for you. Take care and have a great day. Well, I certainly hope you enjoyed our latest installation of the Manage the Funds podcast covered 19 Market in Economy Special. If you have any questions, certainly don’t hesitate to reach out to us anytime.

You can always drop questions to us very easily on social media. You can find us at manage the funds. That’s how our handle there’s no spaces or you can find us manage the funds dot com. I hope you enjoyed this podcast as much as I did recording it. Even with everything that was going on right now. Again, I hope you are all doing safe. You’re doing well. You’re feeling safe and and OK during this real trying time.

Take care and have an outstanding day.