Morgan Stanley: Financial Poise

Financial Poise In An Uncertain Environment

With the seemingly sudden arrival of the coronavirus that caused the disruption across most facets of our lives, the year 2020 is already one that we will not forget, especially from a financial perspective. It seems like ages ago that we watched Joe Burrow lead the LSU Tigers to an undefeated and historic championship season just before the football world witnessed Patrick Mahomes and the Kansas City Chiefs come from behind to win Super Bowl LIV.

The worst global pandemic in recent memory has disrupted the global economies and labor markets. But it is no secret that the coronavirus has also disrupted the routines of high school, college and professional football teams everywhere. Classes, recruiting, team and position meetings, draft preparations and selections, and even workouts are now being conducted virtually. These times are certainly unprecedented.

Likewise, the panic and fear from the pandemic has taken its toll on the financial markets. With a return of -19.6% in the first quarter of 2020, the S&P 500 representing the 500 largest publicly-traded companies in the U.S. recorded its worst quarter since 2008 and its worst ever start to a year. Developed International Equities, Emerging Markets Equities, and Commodities each sold off by more than 23%. On the flipside, investors with high-quality, investment-grade bonds in their portfolios were rewarded with a positive return of over 3%. So, diversification worked for some investors, but the panic in the markets whipsawed most stock market investors with record-setting volatility.

Morgan Stanley: Chart 1 Chart 1: Asset Class Returns

While the recent market crash has been swift and fierce (and it may not be finished), there is precedent for optimism. The S&P 500 has corrected 25% or worse 11 times since 1929. On average, equity markets have recovered their losses in an average of 50 months. In every one of those previous 11 market crashes, the subsequent 3-, 6-, and 12-month returns have all been positive. Much like a disciplined team who faces adversity but remains focused on its way to a great or even title-winning season, disciplined investors have reason to be hopeful that their investments will also prevail and their financial planning goals will be achieved.

Morgan Stanley: Chart 2 Chart 2: Historical Data Suggests That Markets Will Recover

The Playbook For Financial Investing During Turbulent Times

1)    Stay Invested

You may be anxious about the decrease in the value of your investments. But don’t be tempted to move out of the market, sit on the sidelines and wait for prices to rebound. Trying to time the market could potentially jeopardize your financial strategy — and your future goals.

2)    Continue Contributions

It may not seem intuitive, but continuing to contribute to your retirement plan — even during market downturns — can potentially enhance your returns over the long-run. A down market can be an opportunity for you to acquire more shares of your investments at a lower price. Consistent investing through market ups and downs is called “dollar-cost averaging.” If an investment’s price is high, you buy fewer shares, or units. When prices are low, you buy more. Investing regularly, using dollar-cost averaging, can help reduce the risk associated with buying during big swings in market prices.

3)    Maintain A Long-Term Focus

Any investment decisions you make should be based on your financial goals and objectives, time horizon and risk tolerance, rather than concerns about market volatility. Even if the market seems volatile, remember that ups and downs are normal. It is important to stay focused on your financial future and refrain from making short-term decisions on long-term investments.

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While market events are out of our control, we do have control over our financial objectives and how our investments are allocated to help us achieve them.

Morgan Stanley: Chart 3 Chart 3: Over the Long-Term, S&P 500 Has Grown Despite Negative Events

4)    Diversify

If you’ve ever heard the saying, “Don’t put all your eggs in one basket,” then you already have a basic understanding of diversification. Diversifying your portfolio can reduce risk and volatility. Review your account and make sure your portfolio is not too heavily weighted in any single asset class.

What Now?

If you are not sure if your investment portfolio is positioned to recover properly after this sudden and severe market correction, please do not hesitate to reach out.  Our team is happy to coach you through some fundamental action steps and to offer perspective on how this generational event may impact your long-term financial and retirement planning.

In the meantime, keep yourself, your family, and your team safe and healthy.

About the authors:

Investment with Matt Kuerzi and Keith NorrisMatt Kuerzi, Vice President and Financial Advisor, and Keith Norris, First Vice President and Financial Advisor, comprise The WNK Group at Morgan Stanley in Louisville, Kentucky.  They have a combined 40 years of experience helping families with their financial planning (1).  In 2019, Matt was recognized by Forbes in their first ever list of “Best-In-State Next-Gen Advisors”.  He can be reached directly at (502) 394-4094 or

(1)   Keith Norris, First Vice President, Financial Advisor, experienced in the financial services industry since 1997.  Matt Kuerzi, Vice President, Financial Advisor, experienced in the financial services industry since 2002. 

The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be appropriate for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Information contained herein has been obtained from sources considered to be reliable, but we do not guarantee their accuracy or completeness.

Asset allocation and diversification do not guarantee a profit or protect against loss. Any type of continuous or periodic investment plan does not assure a profit and does not protect against loss in declining markets. Since such a plan involves continuous investment in securities regardless of fluctuating price levels of such securities, the investor should consider his financial ability to continue his purchases through periods of low price levels.

Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice and are not “fiduciaries” (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise provided in writing by Morgan Stanley and/or as described at Individuals are encouraged to consult their tax and legal advisors (a) before establishing a retirement plan or account, and (b) regarding any potential tax, ERISA and related consequences of any investments made under such plan or account.

Indices are unmanaged. An investor cannot invest directly in an index. They are shown for illustration purposes only and do not show the performance of any specific investment. Reference to an index does not imply that the portfolio will achieve return, volatility or other results similar to the index. The composition of an index may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility, or tracking error target, all of which are subject to change over time.

For index, indicator and survey definitions referenced in this report please visit the following:

Source: Forbes Magazine (September 2019). Data provided by SHOOKTM Research, LLC. Data as of 3/31/19. SHOOK considered Financial Advisors born in 1980 or later with a minimum 4 years relevant experience, who have: built their own practices and lead their teams; joined teams and are viewed as future leadership; or a combination of both. Ranking algorithm is based on qualitative measures: telephone and in-person interviews, client retention, industry experience, credentials, review of compliance records, firm nominations; and quantitative criteria, such as: assets under management and revenue generated for their firms. Investment performance is not a criterion because client objectives and risk tolerances vary, and advisors rarely have audited performance reports. Rankings are based on the opinions of SHOOK Research, LLC, which does not receive compensation from the advisors or their firms in exchange for placement on a ranking. The rating may not be representative of any one client’s experience and is not indicative of the Financial Advisor’s future performance. Neither Morgan Stanley Smith Barney LLC nor its Financial Advisors or Private Wealth Advisors pays a fee to Forbes or SHOOK Research in exchange for the ranking.  For more information see

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