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Investment Market Update
Investment Market Update | March 16, 2020

The odds of the US economy falling into recession are increasing daily from the government and consumer response to the spread of the coronavirus. Up to this point, because of a conservatively oriented diversification, generally our client accounts have held up well when compared to the broad equity market. However capital preservation is a key element of total long term return, and as a precaution against a more significant market decline, or a prolonged economic upheaval if the virus should not be adequately contained, we have taken the step of temporarily reducing the overall equity allocation for most clients. The equities (or funds) liquidated were primarily concentrated in sectors that have (or could) see the most negative impact from current and future economic weakness. If you don’t see any updates to your portfolio allocation today, that reflects the fact that your current allocation is already considered very conservative.

The individual companies I have elected to retain are some of the best in their sector, have strong free cash flow, and excellent records of maintaining and growing their dividend even during challenging economic environments. We will maintain this reduced equity allocation across our client portfolios until we see more stability return to the investment markets. As the market finds stability and begins to recover, we will look for opportunities to add back more equity allocation by adding positions in the very best run companies as the market weakness causes their valuations to reach attractive levels.


(Also please note – The safety and well-being of our clients and staff are always the highest priority at YHB, which is why we are deploying these additional measures:

  • YHB offices are operating with minimal personnel to reduce the risk of exposure. While staff members are working remotely, they will be available by e-mail or phone.  We encourage you to use our secure file transfer portal for sending documents. However, at this time our offices are open and accepting paper copies that can be dropped off at the front desk or sent by mail.
  • Per the recommendation of VA Department of Health, we are restricting staff travel and attendance at large gatherings. Therefore, we are asking that all client meetings be held utilizing our virtual capabilities, either by phone or video conference.)
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