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Monitoring the Coronavirus

The coronavirus originated in the city of Wuhan, China, in December, and as of our writing this communication it has infected over 82,000 people resulting in 2,800 deaths. Up until the last week, global stock markets shrugged off concerns about a wider spread of the virus. However, an increase in reported cases outside of China in recent days has raised concerns about the potential for a global pandemic. This has resulted in a stock market correction around the world with the S&P 500 correcting over 10% in the last week.

There are a few main issues that are occupying our minds and that of global markets:

How contagious and dangerous is the virus?

  • While the absolute number of cases outside of China still remains small, the increased pace of reported cases is concerning. Korea, Iran, Italy and Japan are currently hot spots of particular concern. As we write this, the first coronavirus case in the United States that could not be linked to foreign travel was confirmed as well.
  • However, it appears that the growth of reported cases in China has slowed in recent days. If this data can be relied upon and the trend in China continues, this may demonstrate that human behavior (e.g., quarantines) can control transmission of the virus and perhaps the virus is not as contagious as was originally believed.
  • Early estimates of the death rate upon contraction of the virus are roughly 2%. As a point of comparison, the SARS outbreak in 2003 had a fatality rate of 9.6%.
  • To date, there have been no reported deaths in those aged nine years and younger, implying that very young children are not as susceptible to this virus.

How much can the virus hurt global economic growth?

  • Efforts to contain the virus have resulted in numerous factories, public sites and workplaces being closed both in China and now abroad.
  • This has caused and will continue to cause substantial business disruption across the globe. One example is Apple’s recent warning that they expect lower revenue growth due to the outbreak’s impact on iPhone manufacturing (they have numerous factories near the heart of the outbreak).
  • At around 20% of the global gross domestic product (GDP), China is the second-largest economy in the world. Estimates are that growth in China in 2020 will slow from pre-virus forecasts of 5% down to 3%. This should reduce global GDP growth by roughly 0.4% from forecasts of 2.9% to 2.5%. These estimates may be somewhat rosy depending upon how far the virus ultimately spreads.

Historically, financial markets have been somewhat resilient in the face of past epidemics. Short-term corrections in global stock markets have typically been followed by renewed uptrends within a few months. The concern, of course, is that the spread of this virus will be more aggressive than the spread of other viruses in recent decades. The most important question for investors is whether your portfolio is prepared for the potentially challenging environment ahead. While our portfolios are not immune to stock market corrections, our concerned view of the world and heightened exposure to alternatives should provide some insulation against market shocks. We prefer to be prepared in advance of unexpected market events such as this as opposed to reacting after the fact. In the face of short-term volatility, it is important to keep in mind the goals and financial plan that helped build your portfolio for the long term.

Financial Bites – Life Insurance and Long-Term Care Video

We kicked off 2020 strong with the fifth session in our new Financial Bites lunch series, Life Insurance and Long-Term Care! The thing no one wants to pay for but everyone needs, life insurance, was this Financial Bites’ main course. Our advisors provided important how-to knowledge to ensure your dollar goes farther and that you get the most out of your insurance policy. Thank you to all our attendees as well as our outstanding wealth advisors, Kevin Rex and Patrice Benning, who presented.

Click on the above image or visit this link to watch our Life Insurance and Long-Term Care session:

https://vimeo.com/mortoncapital/fblifeinsuranceandlongtermcare

We hope you find this video valuable. Please feel free to share this link with family and friends and on your social media channels. Any feedback you have would be extremely valuable to our team, including any recommendations of topics you would like us to present on in the future. Financial Bites is a complimentary series and our upcoming sessions are filling up fast, so we encourage you to RSVP soon. Click on the link below to view all sessions and RSVP today!

https://mortoncapital.com/financialbites

We hope to see you soon and thank you for your continued support of Morton Capital.

The MC Team

White Paper – Multiple Advisors vs. One Advisor

Working in finance, it’s become clear to me that decisions surrounding money are commonly influenced by feelings. Those feelings can range from happiness and comfort to fear and greed—the list goes on and on. A natural result of these varied emotions is that people are often hesitant to use one advisor because they are concerned about “putting all of their eggs in one basket.” The choice to have one advisor or multiple advisors is very personal, but it shouldn’t be emotional.

Financial Bites – Retirement Planning Session Video and Update

Recently we hosted the first event in our new Financial Bites lunch series. The session focused on retirement planning and was an incredible success. We are grateful to everyone who attended and to our outstanding wealth advisors, Chris Galeski and Chelsea Watson, who presented.

Clients often come to us asking, “How much do I need to save for retirement?” This session addressed this question by focusing on smarter ways to save, how to more efficiently invest those savings, and how to balance your normal expenses with future costs.

Click on the above image or visit this link to watch our Retirement Planning session: https://vimeo.com/mortoncapital/fbretirementplanning

We hope you enjoy this video of the event. Please feel free to share this link with family and friends and on your social media channels. Any feedback you have would be extremely valuable to our team, including any recommendations of topics you would like us to present on in the future. Financial Bites is a complimentary series and our upcoming sessions are filling up fast, so we encourage you to RSVP soon. Click on the link below to view all sessions and RSVP today!

https://mortoncapital.com/financialbites

We hope to see you soon and thank you for your continued support of Morton Capital.

The MC Team