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Language Notification

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Pandemic-Investing-101

Perspectives

Pandemic Investing 101: Actionable Insights After The First Quarter

David Bailin

By David Bailin

Chief Investment Officer

April 9, 2020Posted InEquities, Fixed Income and Investment Strategy

PANDEMIC INVESTING 101: If the virus completes its first global cycle by summer, this recession would potentially be both the shortest and deepest in modern history. Thus, if Q2-2020 is as bad as we suspect, the bottom of this recession will occur sometime within the next 90-120 days. Pandemic Investing is likely to require us to make faster decisions with less information than we have been comfortable with before. History strongly suggests markets don’t bottom when investors feel brave and confident, but rather when they don’t believe gains are possible. As such, we think clients should be prepared to invest into the eye of the COVID storm.

WHERE TO FIND VALUE IN DIVIDEND EQUITIES: In a post-COVID-19 world, we revisit the value of dividends. New investment dollars should first be allocated to the firms least impacted by the COVID-led economic crisis. This is even the case when taking into account the fact that such shares have seen much smaller price declines than the most impacted industries. Firms that overlap our “unstoppable trends”, including healthcare (“invest in longevity”) and Information Technology (“Digitization”) seem likely to sustain some measure of growth.

A QUARTER FOR THE HISTORY BOOKS: Lots of record breaking and none of it good. The 30% decline on the S&P 500 from its February peak marked the swiftest correction in history at 22 days. We saw massive outflows from municipal bonds, indiscriminate selling of even AAA corporate bonds, and wide bid/ask spreads in mortgage securities guaranteed by the US government. Global high yield bonds declined 15% and investment grade credit indices fell 5.4%. For these markets (and many others), such returns marked the worst quarter to start a New Year on record.

GDP DATA AS PRESENTED WILL OVERSTATE REAL GROWTH: It is clear that this pandemic presents an exogenous shock that will cause an unprecedented, extremely deep short-term economic collapse. Even if the Q3 2020 rebound we expect takes place, real US GDP would only be back to early 2017 levels. It would therefore take a couple of years at minimum to return to the late 2019 output level.

Read Pandemic Investing 101