Current Market Cautions

March 05, 2020

Marc Scudillo, Managing Director, and Steve Wang, Chief Investment Analyst, of EisnerAmper's Wealth Management and Corporate Benefits discuss the Quarter 1 Investment Committee Meeting. The third part of this series discusses considerations when repositioning portfolios, such as debt accumulation, inflation potential and unforeseen events that can impact markets.

This video was recorded on February 25, 2020. Update to follow. View the full video here.

Transcript

Marc Scudillo: So let's touch base. I know in one of our market commentaries that you had put out over the last quarter had mentioned that there's three items that we're concerned about. One of which being too much debt that's being accumulated by the country as well as by certain individuals, along companies along the way. And there's a concern for the debt.

You also had mentioned if there is an uptick in inflation that proposes a risk to the markets. And fortunately we've been pretty stable when it comes to inflation. Last, you had mentioned that there was some additional variables that could come in and impact the markets along the way. You happened to have seen a strong one that hit yesterday.

Steve Wang: That's right.
Marc Scudillo:And the impact that it happens to the market. So tell us a little bit about what happened yesterday.
Steve Wang:What happened yesterday was Coronavirus that has been a spreading around the globe, which is what we consider as a Black Swan type of event. And that is an event which no one can predict in advance. That's why when this kind of event hits the market, it caused some nervous reactions around the globe. The Coronavirus is starting to spread not only in China but also in some Asian countries and in Europe.

So, within the U.S. we want to be very careful in terms of how we react to this type of event when we manage the client's portfolio.
Marc Scudillo: Right. And we had discussed that the impact can be a longer term, some of the supply chain issues that could creep into the market over the next months, year.
Steve Wang: Correct.
Marc Scudillo:But we also had discussed that there's opportunity for other countries, other manufacturing facilities that are outside of China that might be able to come up and pick up some of the slack. So the cost benefit analysis is still yet to be fully understood or known what the impact is on the market.
Steve Wang: That's right.
Marc Scudillo:So we'll discuss what does that mean as we conclude here and what our conversations were from our investment committee of what we can do and what's been done to help our clients and these types of situations. Of course if it's not the Coronavirus it could be something else that could come in and impact the market along the way.

About Marc Scudillo

Marc Scudillo provides financial planning, investment and wealth preservation protection services to both individuals and corporations.

More in This Series

Your Portfolio & Financial Plan

The final part in this series emphasizes the importance of actively managing risk within an individual’s financial plan.

A New Fixed Income Paradigm

The fifth part of this series discusses how the extended low interest rate environment has impacted the strategy for minimizing volatility while generating income.