Market volatility...and not the good kind...

Dear Clients and Friends of ZWM,

The recent downturn in the markets is unsettling, and please rest assured that we are carefully reviewing your portfolios. A little over a year ago, we put the “defensive team” on the field. We positioned client investments to align with their ability to weather whatever storms may lie on the horizon. We hope that the tariff war does not trigger a recession, but either way, we remain in the stock markets for the long term.

So, why? Why not sell all stocks?

Well, first of all, our bond portfolios are designed to wait out most recessions and are modeled to stand up against something like the Great Depression. We would sell bonds for those that need cash for their living expenses and other goals, allowing the stocks to wait for the recovery. We have kept those bond positions strong, generally in United States Treasury Bond ETFs. That is the “defensive team.”

While some would say, “Sell, Sell, Sell!” your stocks, we disagree.

We are invested in strong companies, and the vast majority are based in the U.S. We hope that there is a rational way through the current upheaval, and we are confident that 3-5 years down the road, the markets will have recovered from whatever lows we reach, recession or not.For those of you who were with us in 2007-2009, you may remember that we took a similar approach, and our portfolios were down less than the markets, and recovered very robustly. (Of course, past performance is no guarantee of future results.)

So, please hang in there. With the atmosphere of political unpredictability, the markets will likely remain very volatile. As we said many times before, the markets hate unpredictability. This may be a rocky road for many months, but we expect a return to more rational markets later this year.

As always, please feel free to contact us with any questions or concerns.  

With our regards,

Tom Zimmerman, and our whole team at Zimmerman Wealth Management, LLC