A Message to Our Clients About COVID-19

How to Remain Hopeful and Keep Perspective During the COVID-19 Outbreak

We are facing something we have never faced before in our lifetimes. That is a fact and, in time, when the news of the pandemic spreading and the recommendations on social distancing getting broader by the day, it can be hard to feel certain or safe about anything.

Although Peak Financial clients have benefitted tremendously from the risk and volatility reduction strategies used to manage their assets, it is still very troubling to watch the unprecedented market decline and hard to tune out the constant media noise regarding losses. But most importantly, we need to maintain our health and the health and safety of our family, friends, and neighbors. Covid-19 which emerged late in 2019 in China has spread rapidly worldwide since then and is a global pandemic. The measures taken by leaders around the globe have for the most part been strong, leaving most children without a classroom to go to, parents working from home or without a job altogether, and investors uncertainty causing panic about what is to come.

This disruption to daily life and to our psyches is substantial and it’s terrible. The coming weeks will not be easy, but these measures are practical and prudent.

Our Current Reality IS NOT Permanent

The markets have made a clear statement as to what they think of this short-term reality. They have recognized that to properly combat this global public health crisis from getting worse, there will be a great deal of collateral economic damage. Short-term growth and earnings, which drives optimism for the stock market and investors, basically what drives the market, will most likely be severely stunted. Economists have resigned themselves to the fact that at best, at least a mild recession is inevitable, though experts believe it could be short-lived.

China, which has seen the worst of the outbreak and is slowly returning to normal daily life, is expecting a smaller GDP growth of around 5% for 2020 versus 6.1% for 2019 though that number may shrink depending on the impact of the virus has on its global trading partners. The reality is that much of the world will experience a short-term recession, but without these drastic measures today, the impact both in terms of public health and economically could be far worse, for many months and maybe even years.

In a time when uncertainty is simply a part of daily life, let’s look at some points where we can perhaps gain some valuable perspective:

  1. Markets see a sharp decline from time to time: While never an easy pill to swallow, bear markets happen. In fact, bear markets typically happen every 5 years and this ten (10) year growth spurt is more unprecedented than this most recent shockwave. Since 1929 the stock market has seen declines averaging -39.5% every seven (7) years on average. So a market decline, or crash, should have been expected.
  2. Economic and market recovery is highly likely. The recession that followed the global financial crisis of 2008 and 2009 was very long. There is still anxiety among those who were so deeply affected by it that it could happen again. This current challenge doesn’t have the same characteristics, however. Our foundation is much stronger than it was then. As Joe Davis, Global Chief Economist for Vanguard put it, “The global financial crisis was a house of cards falling down, a crisis of excessive leverage, with the financial system itself in jeopardy. The system is sounder now. And although we do expect that global economies will contract in the second quarter; we believe that most will be in a position to rebound strongly later this year and early next year when the virus-related shock subsides, and pent-up demand emerges.”
  3. If retired or nearing retirement, you should consider reducing your overall risk. You cannot afford to suffer big losses at this time of your life. Your goals should be principal preservation and income distribution. No longer should you focus on maximum growth, with its’ accompanying maximum risk.
  4. The response by leaders worldwide will be critical. The swift and decisive action taken by world leaders in recent weeks to mitigate the spread of the virus is the same type of approach that must be taken toward the economic impact. If economic policymakers take advantage of the interest rates at almost-zero and use that stimulus to contain the virus and provide cash flow for households and small to medium-sized businesses to stay afloat, then the fallout will more likely remain a short-term issue and not a long-term problem.
  5. Understand that no matter what, we will all get through this. Regardless of how hard things get in this fight, we are all in, we will as a community, and world, get through it all. The more we focus on protecting everyone by protecting ourselves, the better off we will be. The more we focus on getting by with what we need on a day-to-day basis and not get sucked into the “hoarding mental state” so that others may also get by, the better off you will be and the better off the world will be.

Making our way through this is something that will require us all to come together as a community both locally and globally. And for that reminder, I am grateful. We are not alone in this and it truly will take the entire village to right this ship. In the meantime, we must take comfort in what we know and keep perspective on all that we do not. What we know is that there will be a temporary downturn in the market and some minor/moderate/major temporary lifestyle changes, but, we believe that the financial markets, global economies, and our lives are resilient and there is no reason to think that this time should be any different.

We are here to take your calls and provide support to you during this difficult time. You can reach us via email at info@peakfin.com or via phone at 916-791-7063. If you would like to schedule a video meeting or a phone call, please follow this link to find a convenient time. We will continue to provide you with updates in the coming days and weeks and encourage you to stay safe, stay calm and stay in touch.



  1. Vanguard analysis based on the MSCI World Index from January 1, 1980, through December 31, 1987, and the MSCI AC World Index, thereafter, indexed to 100 as of December 31, 1979. Both indexes are denominated in U.S. dollars.
  2. https://advisors.vanguard.com/insights/article/coronavirusdownturnoutlook?cmpgn=FAS%3AEM%3AME%3A224903795899
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Roseville, CA 95661


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