In these days of travel restrictions, several conferences have become teleconferences. Today, I had two such meetings. Although I love to travel and visit different places around the country, I’ve got to say; it’s nice to be at home in my bed tonight!
Thank goodness the opportunity to learn is still available every single day. (Parents enjoy the time you are learning with your kiddos from home! Granted, I would not want to be teaching algebra and science!) When this is all over, we will know who the real heroes in our community are. The teachers, the administrators, the health care workers (all of them), the people who stock our groceries, the drive-thru clerks, and the truckers! And of course, the people who manufacture the paper goods!
The first phone conference today was with two amazing women who manage money in our investment funds at Capital Group/American Funds. Janet Gordon and Jody Jonsson have become friends, brilliant friends, over the years. Learning their current perspective recharged our batteries. Today’s topic was What’s Next for the Equity Market.
One of the reasons that make Capital and American Funds so different is their intense research. The relationships Capital has with the biggest, oldest, AND newest, strongest companies around the world is a strength that cannot be measured. Folks like Janet and Jody can ask the hard questions. And they do! Research doesn’t stop because the world closes business doors while we pause to heal or flatten the curve of a virus. The research continues. Their conversations are deep. Both leaders mentioned strategies and companies they feel will come out of this event stronger and will present exciting investment opportunities. Some companies, have been initially impaired but will come out healed. Some companies will suffer for years to come.
A couple of factors we admire about Capital Group and American Funds are 1) the philosophy of finding value or bargains in this research and 2) the tremendous experience of our investment team. Their mission is to provide consistent results, especially in negative periods. Janet mentioned an early morning investment meeting in a virtual room with professionals located around the globe. (For participants on the call, it was either an early morning, late afternoon, or midday meeting given the various time zones around the world.) She said they started the session with a roll call of those professionals with 25 plus years of managing money in the funds, asking them to share their insight for this bear market. She said many of them felt last week was the week to put cash to work.
Yet another factor on which we agree is diversification—owning lots of companies. Across industries. Across continents. And we also like the diversification of opinions. Janet said she is keeping “dry powder” because she thinks there may still be some bargains on her shopping list in the companies she likes in defense, health care, and high-quality technology companies. Jody has found the multinationals she follows are suddenly a bargain as she believes we will experience an industrial renaissance in the United States. Multinational companies want to err on the side of resiliency and flexibility versus efficiency. And they want to control supply chains close to their customers.
The last factor in which we align with Capital Group and American Funds segues into the last meeting of my day. Janet and Jody both reiterated that we should reassure our clients, who strongly feel the desire to do something because of heightened emotions, that our professionals at Capital are doing something ALL day EVERY day.
They are positioning you for the next few days and months, but most of all, for the rest of your life plans. They monitor changing conditions. Along with analysts, portfolio managers, we have scientists, physicians, and consumer pollsters determining how this virus will change our lives. They asked us to share with you to stay focused on your long-term plans and goals. Their last statements reiterated the professionals at Capital who manage your money are working night and day, around the world, with you in mind, in each and every investment decision.
On the next teleconference, I was invited to speak, along with two other financial advisors and two mentors, on a panel for newer advisors about how we are communicating with our clients. A common theme among us, we are all working as hard and as much as we can to keep you focused on plans and goals. And to make sure you understand that we know how hard these kinds of periods are. All advisors agreed, these are the days we earn our keep. Our efforts during the volatile times matter to you the most. We all mentioned communicating in all the ways we know how. It may look like we are writing or talking a little too much, but self-isolating is very hard for helpers!
As this call ended, I remembered how Janet and Jody finished their meeting earlier. Their closing comments were, “Never give up on the power of positivity and ingenuity in times when negativity abounds.”
Janet stated, while the characteristics and nature of bear markets are always different, the similarities in all bear markets in history are that the problems were solved. The market recovered.
Jody ended the call by saying, “The best advice is to lean the opposite direction of the negativity.” I think I will post that on my computer screen! Don’t be surprised if you hear me repeat it once or twice or ten times over the next 20 years!