Updates, Tips, & Finance News
Hi there,
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.
Market update
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.
Disclosures:
The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The information provided does not take into account the specific objectives, financial situation or particular needs of any specific person. Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. Forecasts or projections of investment outcomes in investment plans are estimates only, based upon numerous assumptions about future capital markets returns and economic factors. As estimates, they are imprecise and hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Investing entails risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time. The opinions expressed by Round represent the current, good faith views of Round and are provided for limited purposes, are not definitive investment advice and should not be relied upon as such.
The stock market is in reference to the S&P 500 index. An index is unmanaged, does not reflect management or trading fees, and one cannot invest directly in an index. Performance of the S&P 500 index is in reference to Bloomberg terminal’s SPX Index total return with dividend reinvestment from market close of 2/19/2020 to the market close of 2/28/2020. The last four months of gains for the SPX Index was in reference to the 10/28/2019 - 2/28/2020 time period, market close to market close and total return with dividend reinvestment.