Lessons Learned From the Onset of the Pandemic, Terry Gardner, C.J. Lawrence Market Comment 031124

In this video, Terry Gardner looks back at the market turmoil surrounding the early days of the Covid-19 epidemic.

Good afternoon, everyone. This is Terry Gardner from C.J. Lawrence. It’s Monday, March 11th, 2024, coming to you live from Midtown Manhattan. You might even hear Mister Softee playing in the background — a good sign of spring here! Hope springs eternal. 

Today’s market commentary will be a look back at the past four years. We’ll reflect on where we were when COVID-19 hit the U.S. in March 2020. Remember how Italy was initially affected? That weekend, the news ignited a market plunge on Monday, March 9th.

Where was I? I was actually live on the set of Yahoo Finance’s “First Trade” with Brian Sozzi, Alexis Christoforous, and Andy Serwer. As futures plummeted, we witnessed the market open and circuit breakers trigger within minutes, halting trading. Oil prices also dropped a staggering 20% that morning, reaching an unprecedented low at the time.

Amidst the chaos, we discussed what was happening and what might unfold. I’ve attached the clip to the email for your reference. If you don’t have it and want it, just let me know, or you can search for it on Yahoo Finance.

The key takeaway then, and even now, is that during periods of chaos, it’s crucial to stay calm. While it’s tempting to react impulsively, remember: this too shall pass. We emphasized the importance of “looking across the valley” — focusing on strong, strategically positioned companies that will likely remain resilient through the downturn.

Reflecting on the video, here are three points worth considering:

• Focus two to three-quarters out when things are bad. Trading on short-term fluctuations can be difficult. Instead, focus on companies well-positioned for future success, even if the economic or global outlook seems uncertain.
• Look for a turning point when stocks stop reacting negatively to bad news. During the initial months of COVID-19, once the market absorbed the bad news and stock prices stabilized, it signaled a potential bottom. This is a valuable lesson for navigating similar situations.
• Prioritize companies experiencing secular change. Businesses in industries undergoing long-term, positive shifts are better equipped to weather economic cycles compared to those solely reliant on cyclical trends.

Looking back, those who stayed invested, even on March 9th, were rewarded. A simple investment in the S&P 500 would have yielded a 38.76% return within a year. Dislocations, while challenging, can present opportunities.

The key message is this: equities offer excellent long-term returns. If you have a long-term investment horizon, periods of market volatility can be opportunities in disguise.

I hope this helps! Feel free to contact me if you have any questions or would like the link to the original video.