• Brad Clinard

Letter from our Founder

Dear Clients and Friends – The battle with COVID-19 continues. Some days it feels like the headlines continue to worsen as the number of new cases and deaths are reported by the news media. Individuals and companies are hurting, with even an iconic company like The Cheesecake Factory telling its landlords they won’t be able to make their rent payments for April. This current situation is a human crisis, and there is no way to put a value on the lives that have been lost. However, we will get past this pandemic, as we’ve gotten past every other crisis, and we will see better times in the future.  As Warren Buffett stated, when clouds are dark, that could spell opportunity for longer-term investors. We’re already seeing some good news on the horizon. The number of new cases may have peaked in Spain and Italy, the epicenter of the outbreak in Europe. Here at home, new cases may begin to slow within the next few weeks, while Seattle, one of the first major cities in the United States to have an outbreak, has reached its peak of new cases. The dual-front support from the Federal Reserve (Fed) and Washington’s recent $ 2 Trillion fiscal stimulus plan (CARES Act) won’t fix the root of the problem—only doctors and scientists can—but it may help the economy restart more quickly once the pandemic subsides. Fed Chairman Jerome Powell noted we very well may be in a recession, but this isn’t a typical recession, as our economy started from a strong position two months ago. The $ 2 Trillion CARES Act, totaling more than 9.3 % of GDP, provided an additional boost. For reference, the 2008 fiscal stimulus plan was 5.5 % of GDP, showing just how much larger this plan is than anything else we’ve ever seen. These measures may be viewed as a bridge for consumers and small businesses to help them get to the other side, and so businesses are positioned to take full advantage when the economy restarts.  The combined monetary and fiscal policy action may be the catalyst to propel a historic bounce back for our economy over the second half of this year. I remember helping clients through the 1987 crash and that gave me perspective. Let’s not forget, World War I (WW1) took more than 15 million lives, only to be followed by the pandemic of 1918, which claimed another 50 million lives. Very few would have expected to see the boom in technological development, economic growth, and the stock market that followed during the “Roaring 1920s”.  It is always darkest right before the dawn, and our resolve and determination will once again shine through. Longer-term investors may want to consider looking for opportunities to invest in an eventual market recovery, as Warren Buffett would say, they better get their buckets ready. Please stay healthy, and please contact our team if you have any questions or concerns. Continued Best,