We are fully aware of the impact that the coronavirus has been having on stock prices. Undoubtedly, the virus will effect travel, energy prices, and global supply chains. This will be a temporary situation. Nevertheless, at today's elevated prices, and with the enormous popularity of passive investing, we can expect further volatility. At the same time, we are in the middle of a very heated and divisive election process.
Longer term, we are always prepared for these things. Extreme volatility will most likely provide buying opportunities in many areas. Moreover, while a cut in interest rates seemed unlikely as of last week, the spread of the virus and people’s reaction to it seem to make a rate cut more likely sometime this year. We are not about to act rashly. We always hold some low-volatility assets in the majority of portfolios, and when it seems appropriate, after considering the tax consequences of any moves, we will take advantage of lower prices and rebalance.