There is a lot of hysteria surrounding the Coronavirus in the media at the moment.
We are going to break down what is going on in the markets, what Round is doing in response, and what you can do right now.
Round portfolios are currently: Risk Off.
1) What’s going on: the worst week for stocks since the financial crisis
The stock market is down -12.7%.
The stock market erased its last four months of gains within just a week. In our opinion, we believe there will be swings up and down in the market until we get some more clarity on the virus.
In the meantime, we have seen central banks around the world signaling a willingness to step in and provide stimulus should the situation get worse. Given the amount of cash that central banks have already pumped into the markets, there could be a sharp rally in a scenario where the virus turns out to be overblown.
2) What we’re doing: remaining defensive
We were already Risk Off going into the coronavirus sell-off. And we will continue to remain Risk Off until we see signs of recovery. All Round accounts have reduced exposure to stocks and have increased exposure to municipal bonds and enhanced cash in an effort to reduce portfolio risks.
We believe that active professional management helps provide smoother returns and dampen violent fluctuations in your portfolio. While that means that you might still be down in a market-wide sell-off, the objective is to be down less than broader market indices.
3) What you can do: add money
We believe now is a great time to add money to your Round account.
When adding cash to your account now, it may be deployed to more Risk Off assets or sit in cash in the short-term, but we are looking to opportunistically buy when the time is right.
What 'Risk Off' means
Round portfolios are complex and dynamic, but on a top-level, they can be boiled down to two overarching concepts: Risk Off and Risk On.
Risk Off means that the portfolios are positioned away from riskier areas when it's just not worth taking on the additional risk. Risk On means that the portfolios have repositioned to take on additional risk.