Important Market Update from BSW

March 1, 2020

David Wolf here — I serve as BSW’s CEO. In light of last week’s dramatic market selloff, I wanted to reach out to all BSW clients, colleagues, and friends with a message of reassurance and resilience.

As a backdrop, stock markets around the world unwound last week. In the US, stocks suffered their biggest one week decline since October 2008, with the S&P 500 retreating 12.95% from its recent intraday peak on February 19th. In common investment parlance, a “correction” is a decline of 10% or more, while a “bear market” is a decline of more than 20%.

Throughout this week, folks have been asking me, “What caused this? Why now?” Well, markets hate uncertainty. And the past week delivered a heaping spoonful of uncertainty in the form of the coronavirus, the prospect of an undetermined Democratic presidential candidate, and anxiety over market highs and forward earnings. Political dysfunction and concerns about market levels are nothing new — but the coronavirus provided a new, exogenous catalyst to stoke fear and panic investors.

At BSW’s offices, I keep a journal of investment wisdom that I’ve picked up over my two decades working as a professional investor. Stories, quotes, anecdotes, etc. It’s a settling reference point when markets get unhinged and helps put things in perspective. One particular entry from a lecture I attended seems to align perfectly with the current dynamic, as well as how BSW strives to approach things:

“Boy oh boy, do crowds love a good apocalypse. They thrive on them. What they don’t like is boring advice about things like long-term investing and compound interest. But that’s how you make money; by ignoring what everyone else is reacting to, putting a strategy in place, and then leaving it alone and letting it grow. Think of it like a small tree you plant in the backyard; you don’t pull it up by the roots every few weeks to see how it’s doing, or because there might be a storm passing through. You tend to it, water it, and let its roots deepen. And one day, lo and behold, it’s a mighty oak.”

Is the current environment scary? Yes. Will it get worse? Probably. Will it get better? Eventually. Do you and we have a plan? Absolutely. While BSW rebalanced portfolios and harvested gains toward the end of January, the most important point to remember is: You have a plan. A plan that takes into account corrections. A plan that takes into account volatility. A plan that will allow you to sleep at night while others claim the sky is falling. A plan that we are tending to and caring for — so that it grows into a mighty oak.

I hope this helps. And please reach out to me or any of my BSW colleagues if you’d like to discuss your plan, or simply for some reassurance, that’s why we’re here.


David Wolf, CEO