Matt Treskovitch

FOR LONG TERM INVESTORS THE FUTURE IS STILL BRIGHT

by Matthew A. Treskovich, CPA/PFS, MBA, CFP®, CMA

The first quarter of 2020 was a time investors will not forget. Stocks began the year on a positive note, reaching all-time highs in January and again in February. Market gains were quickly given back as the coronavirus pandemic and oil price war came to the forefront. Stocks fell in the most rapid bear market in history, declining over 30% by mid-March, before

In the short run, we expect the markets will continue to be volatile. The pandemic and containment measures have created uncertainty about the economy in the short run. For long term investors, the future is still bright.”

rebounding to end the quarter about 20% below the all-time highs.

Times of market stress often bring extreme volatility to the financial markets. Daily moves of 3% to 5% or more have become common in recent weeks. Long-term investors know that these kinds of outsized moves across the market usually don’t reflect long-term fundamentals. During the early part of a market correction, market declines

We have the ingredients for a powerful economic recovery.

and bad news headlines often go hand-in-hand. The market’s inevitable turnaround always happens before the news becomes positive.

Look beyond the headlines

As investors, it’s important to look beyond the immediate bad news. Policymakers have responded to the crisis with incredible speed. Headed into the 2008 crisis, it took the better part of a year for policymakers to acknowledge that a major problem was building. In the current crisis, the Federal Reserve was quick to bring back the tools used during the Great Financial Crisis. The Fed has committed to use all possible measures to ensure the banking system continues to work efficiently. The Fed has also committed to making sure businesses have access to necessary credit. At the same time, Congress has unleashed the largest stimulus package in history. All of these add up to very powerful forces moving the economy forward. The economy is contracting, but no one knows how severe the contraction will be, or how long it will last. We believe that a return to economic normalcy will happen faster than many anticipate. Consumer confidence has fallen sharply over the past month but remains far higher than it was during the 2008- 2009 recession. Unemployment is sharply higher but is largely temporary. Employment should rebound rapidly once the widespread stay-at-home orders are lifted. Low oil prices are problematic for the energy sector right now, but consumers will ultimately benefit.

See Treskovich Pg 25

About the author: Matt is the Chief Investment Officer of the firm of

CPS Investment Advisors with 18 years of experience in financial services also serving as the CFO of an insurance brokerage. With a Master’s degree in Business Administration, with an emphasis on accounting from the University of Phoenix, Matt is a CPA licensed in Florida and holds the AICPA’s Personal Financial Specialist (PFS) designation. Matt is a CERTIFIED FINANCIAL PLANNER ™ and a Certified Management Accountant (CMA). and received a Certificate of Distinguished Performance from the IMA for achieving a CMA exam score in the top ten worldwide. In 2017, he was awarded an AICPA Standing Ovation for exemplary professional achievement in personal financial planning services. Treskovich also is certified as an Accredited Estate Planner® (AEP®) designee by the National Association of Estate Planners & Councils (NAEPC). He is a member of the Institute of Management Accountants, former President of the Mid Florida Chapter and former Treasurer of the IMA Florida Council.