Oil is not an investment. A barrel of oil is just a barrel of oil. If one were to bury it in his backyard and dig it up many years later, it is still just a barrel of oil. This past Monday, the oil dug up backyards sold for ~negative $40; they had to pay for someone to take it away.
The market hates uncertainty. I hate that phrase. News flash: the future is unknowable and therefore always uncertain. There is never more or less uncertainty; there is always 100 percent uncertainty. The reason past crises appear more certain than this one is because they are in the past. Hindsight is 20/20, foresight is nowhere close.
Here we go again. The market has broken through the barrier and we are now officially in a bear market. Markets like this are always scary, but everyone should be reminded that we have a plan, and this too shall pass.
“[T]he only thing we have to fear is…fear itself.” – Franklin D. Roosevelt.
This quote is truer today than at any time I can recall in my career. The coronavirus itself will pale in comparison to the damage done by the fear of the coronavirus.
Will the coronavirus change the market’s overall momentum? Anything is possible, but it is not very likely. In our opinion, trying to guess the long-term impact of such global events is a fool’s errand. Prudent investors know what they own and why they own it.
