An Important Message from Coastwise Chief Investment Officer

Dear Valued Partners and Friends,

I purchased my first publicly traded security in 1980 when the DOW traded well below 1,000. Since that time there have been a myriad of challenges which have faced the world, our country, our economy, and our markets. Many of those are serving as points of reference now – Black Monday in 1987, the bursting of the tech bubble in 2001, and the financial crisis in 2008/2009. While each one was different in origin and duration, they all subsided, and stocks went on to greater heights within a relatively short period thereafter.

This specific situation is complex on one level (and of course involves literally life and death considerations), but at its core is very simple. Virus attacks, in order to kill / slow down virus we must separate, in order to separate we must temporarily but dramatically slow down business / the economy. What is so interesting and unique is that we have effectively self-imposed this slow down. The government has told us to shut business down, and when the time is right, restart it. In the meantime, they will likely soon announce a massive bridge to get individuals and businesses across the inevitable economic gulley – or canyon – that will ensue in the coming weeks and months.

It is not unreasonable to assume – based on history and scientific evidence – that this pandemic will largely subside, and with it, the restrictions on travel, eating out, etc, by summer. History also tells us that we are soon likely to enter the capitulation phase where some investors who have been hanging on say ‘I just can’t take it anymore’ and sell at prices near lows. It is common knowledge that stock markets tend to recover before the economy and headlines turn positive. In no way am I minimizing the human element here, but as a fiduciary who is tasked with advising on clients’ best interests, it is important to keep these fundamental concepts in mind.

Important Pieces of Information to Know

  • We at Coastwise are fully open and functioning at 100% capacity. You may phone our business line or cell phones at any time.

  • Charles Schwab, where funds are custodied, is also fully functioning. We have regular access to all account information, trading platforms, etc. without interruption unlike stories I’m sure you are hearing about newer ‘do it yourself’ investment firms / apps that have been freezing for long periods leaving their customers without the ability to execute orders or get a qualified person on the line.

The reason we talked about preparing (financially, emotionally, etc.) for bear markets so frequently during the most recent bull market is that, like with a hurricane or other unpredictable events, by the time you know it’s coming, it is often too late to prepare. The only question at this point is what actions you take – or don’t take - as an investor between now and the other side of this current challenge. Decisions in times like this are very important; while the virus and bear market will assuredly pass, you may have to live with whatever decisions you make for years to come.

To give you some perspective on the results of various decisions during times like this (investors who sell near lows, investors who hold on for the long term, those who continue to add regularly to their accounts), please watch the following video by Coastwise Financial Advisor Laurie Itkin:

https://www.loom.com/share/a8b974f3b06c484b89f4ea000664919c

Bottom line, we are here for you. We have decades of experience navigating both smooth and treacherous market waters. While we are in contact with you regularly via written and live communications, we want to emphasize that we encourage you to reach out to us at any time with any questions or thoughts. We recognize that each of you is being impacted by this situation differently both financially, health wise, and practically. As such, we are here to discuss your specific circumstances and to help you make smart choices for the near and long term.

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