Since publishing our commentary on the coronavirus last month, we have seen the situation develop and intensify every day — practically every hour. The disease has been spreading in the United States and abroad, international travel has been restricted, and organizers have made the difficult decision to cancel large public gatherings and events.
There has also been an increasing impact to the financial markets with stocks giving back much of their 2019 gains and bond yields plunging. The coronavirus is seen as a major threat to the global economy, and it's impossible to know exactly how long it will last.
But despite these developments — our fundamental beliefs remain unchanged.
We still believe that long-term investors are best served to stay calm, stay the course, and avoid reacting to scary news. In times of extreme uncertainty, especially in situations when we feel powerless, staying calm is easier said than done. But we do not believe the fear-based impact to the markets will be long-term. In our opinion, a properly built, well-diversified investment portfolio is the best place to weather market volatility.
Our investment decisions are not based on the latest market headlines. As mentioned in our last commentary, we will continue to stick to our research-driven investment philosophy. We base our investments on companies' intrinsic value, looking out at least five years. Intrinsic value changes over time, but unlike short-term market movements — value is not determined by news. In other words, our hands remain steady at the wheel.
As valuations return to more realistic levels, we've been constantly vigilant for opportunities. In fact, we have recently done some more buying, adding a few new names to some of our portfolios. If prices continue to become more attractive, we may continue to take advantage.
Investing aside, it's important not to downplay the seriousness of the coronavirus. It has been difficult to watch the devastating toll it has taken on victims and their families. Our thoughts are with those who have contracted the disease, and we hope that researchers can find a cure. We encourage you to stay up-to-date at CDC.gov.
This is an uncertain time, but you don't have to go through it alone. Feel free to reach out to us with any concerns. We're here to answer your questions.
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