Two Years Ago, Two Years from Now
Timelines throughout the Covid-19 pandemic create a blur of what happened and when for many of us. However, I will personally never forget Monday, March 23, 2020. Our office was starting week two of working remotely as the world was is in complete shutdown. The coronavirus was still so new to the United States that the CDC had not yet formally recommended masks as part of the prevention plan (that would come April 3rd). I remember being fearful to go to the grocery store, not knowing if I would get the coronavirus or what impact it may have on me or my family. I wouldn’t even go on an outdoor run with a friend out of caution and recommended guidance. There were no vaccines on the horizon. The market declined another gut wrenching 3% that day, now 35% off the all-time highs and worst drawdown seen since the Great Financial Crisis. No one knew where we would go from here.
It is hard to believe that day was a mere two years ago. It would be impossible to predict the sequence of events that transpired over those two years. From tragedy of significant loss of life across the world to triumph of the fastest development and implementation of vaccines the world has ever seen. The stock market would never look back from the bottom that was found on March 23, 2020 in the very early innings of the global pandemic shutdown. It would double over the following 21 months. Only then to face new significantly volatile events with the tragic war in Ukraine and unbending inflation.
So what will we be talking about, worried about, and the media keeping us stressed about on March 23, 2024? Or March 23, 2026?
Two answers: (1) not the events we are focused on today and (2) no one knows.
That’s the nature of the future. We talk a lot about thinking in decades with your investment plan. So trying to make long term investment decisions based on global events of the present is challenging at best. The Covid-19 pandemic and war in Ukraine are tragic events, and what we often underappreciate is the resilience and adaptive ability of the human spirit in the depths of these events, such as rapid improvements in workplace technology and efficiency or developing and distributing a vaccine at unfathomable speeds. The one thing we know for certain is that the news events of today will inevitably change.
A long term investor knows these major news events and the volatility that come with them are the price of admission we pay in exchange for expected compounding returns over time.
The market has shown that underlying resilient spirit time and time again as it climbed the wall of worry for decades. We are believers it will continue to do so long into the future.
Setting a reminder for 730 days from now to refresh this two year update - see you then.
Andy Michael, CFA
Portfolio Manager
