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This Is a Season

10/28/2020

 

Photo by form PxHere

As we write this morning, the State of Connecticut (“CT”) just announced that neighboring Massachusetts (“MA”) has been placed on CT’s travel advisory list, which means travelers coming from MA must quarantine themselves for 14 days or get a test confirming negative COVID-19 reading.  Residing in Hartford, this latest local news along with the “discouragement” of door-to-door Trick-or-Treating has culminated in a frustrating month of negative COVID-19 developments such as accelerating cases across the U.S. and Western Europe and delays in vaccine developments and treatments.  In addition, COVID-19 U.S. hospitalizations are on the rise (Figure 1) as temperatures drop across the Northern Hemisphere, which is starting to affect Consumer Sentiment (Figure 2).

Figure 1 – COVID-19 U.S. hospitalizations Are on the Rise

Source: Bloomberg

Figure 2 – 2nd Wave Has Dampened Consumer Sentiment

One should be forgiven if ‘fatigue’ is setting in as this nation contends with a reacceleration in COVID outbreaks combined with an especially contentious upcoming election.   It’s especially challenging to retain conviction over long-standing investment principles such as investing for the long run, when so much of the near-term is marked by uncertainty with few lights at the end of the tunnels.    It’s also been an especially challenging season for long-standing value investors such as Ted Aronson who announced he was shutting down his 40-year firm as COVID has condemned value investing to its worst run over two centuries (Figure 3).

Figure 3 – Value Investing Faces Its Worst Run for Over 200 Years (Yes, 200)

Initially, we were going to publish this piece with the title, ‘This is But a Season,’ – the typical phrasing.  However, we then felt adding the word ‘But’ somehow diminishes what most of us are experiencing at the moment and will likely continue to bear the scars from this experience well after the coronavirus somehow becomes more manageable, whether through vaccines or effective antibody treatments.  This is a season, which implies a temporary state rather than permanent, but the renewed COVID outbreaks provide cold comfort to us seeing this current state as only temporary.

Our suggestions:  Take a break from the markets and the electoral headlines.  Maintain your strategic investment program and ensure the time horizon of your projected liabilities are appropriately matched with the risk levels of your investment assets.  Take part in community outreach programs to assist those really suffering from this pandemic.  Bridge differences over politics and ideologies.  And stay focused on the long-term, seeing 2020 (and into 2021) as a temporary season.  Ultimately, taking the focus off of ‘yourself’ will likely prove to be somewhat therapeutic.

Disclosure:

The above is the opinion of the author and should not be relied upon as investment advice or a forecast of the future. It is not a recommendation, offer or solicitation to buy or sell any securities or implement any investment strategy. It is for informational purposes only. The above statistics, data, anecdotes and opinions of others are assumed to be true and accurate however 3D Asset Management does not warrant the accuracy of any of these. There is also no assurance that any of the above are all inclusive or complete. 

3D does not approve or otherwise endorse the information contained in links to third-party sources. 3D is not affiliated with the providers of third-party information and is not responsible for the accuracy of the information contained therein.

Past performance is no guarantee of future results. None of the services offered by 3D Asset Management are insured by the FDIC and the reader is reminded that all investments contain risk. The opinions offered above are as of October 28, 2020 and are subject to change as influencing factors change.

More detail regarding 3D Asset Management, its products, services, personnel, fees and investment methodologies are available in the firm’s Form ADV Part 2 which is available upon request by calling (860) 291-1998, option 2 or emailing sales@3dadvisor.com or visiting 3D’s website at www.3dadvisor.com.

 

By: Benjamin Lavine