Excerpt from Politico’s Morning Money
By BEN WHITE and AUBREE ELIZA WEAVER – 01/28/2020
Coronavirus update — I wrote here about the walloping markets took over the latest news of the coronavirus spread with the Dow closing down around 460.
Key line from David Kotok: “If we see an outbreak, or a cluster of cases in a mature economy like the U.S. or France or you name it and fear is no longer attached to China but spreads, then I think this really tanks markets …
“Then you see a global fear and global slowdown and rightfully so. I’m walking around conferences and I’m the only one wearing a mask. Complacency is a very grave danger in this type of risk environment.”
Alternate view: Leuthold’s Jim Paulsen emails: “Overall Ben – If you are not a pandemic expert – and I am not – how can you really tell? I think this primarily falls into the category of ‘why everyone diversifies their investments.’ Diversification is done to prepare for unpredictable risks, which in my opinion, a virus crisis clearly qualifies.
“The only thing which may be appropriate is perhaps taking advantage of significant stock market weakness by adding to positions. … When SARS hit in the 1990s, both stock prices and bond yields collapsed only to fully recovery a few months later.”
Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.
Sign up for our FREE Cumberland Market Commentaries
Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.