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If you read my “From the Desk of Todd Wike” article last month, I mentioned the relative calm in the markets during 2019 with the hopes that 2020 would continue along the same trajectory. Unfortunately, there’s always the caveat that the markets can suddenly be affected by any number of global issues and here we are. The threat of an emerging pandemic is certainly enough to affect the markets and to get everyone’s nerves on edge. We’re monitoring the current Coronavirus (COVID-19) situation and its effects on markets carefully. We’ll keep you abreast of any significant changes, but right now as I write this, it’s a lot of “what if” scenarios.

There’s a rather large school of thought that the January market losses were an already-awaited market pullback simply fueled by the Coronavirus. Also, during the outbreak of SARS, nearly 20 years ago, the markets had a similar knee jerk reaction, initially pulling back and then bouncing back quickly. There is reason to believe that the recent adjustments in the market are similar to those seen with the SARS epidemic – an overreaction and then back to business as usual.

Despite optimism, China is among the largest global economies and has essentially been shuttered to prevent further spread of the virus. Although some areas of China are opening back up for business, experts say some global economic slowing is bound to occur as stores and factories are closed and travel restrictions are affecting oil production and spending. The current outlook is fluid and we’ll continue to keep you updated as the effects of the Coronavirus are felt throughout the globe and the end result will largely depend on containment or further spread. If you’d like to learn more about 2020 market predictions in light of the Coronavirus, Larry Adam, CFA, CIMA®,.CFP®, Chief Investment Officer, Raymond James, discusses some insights regarding the coming year in video commentary from the end of January.

Please do not hesitate to reach out if you have any questions. More importantly, if you haven’t been in lately to meet with us and check your asset allocations, now’s the time to make an appointment. It’s the best way to prepare yourself against the unavoidable market fluctuations. As the Coronavirus hopefully wanes, we’re still in an election year and uncertainty profoundly affects the markets. Although we’re optimistic about 2020, we want our clients to always feel prepared.

Todd M. Wike, CFP®
Managing Partner, Potomac Financial Group
2019 RJFS Chairman’s Council Member*

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