A Message from ZLC Wealth: March 31st COVID-19 Update

A Message from ZLC Wealth: March 31st COVID-19 Update

It’s March 31st, and here’s what we know…
The following article has been reposted from ZLC Financial affiliate ZLC Wealth Inc. ZLC Wealth’s Portfolio Managers’ are here to serve our clients and provide guidance and peace of mind as we navigate these trying times. If there ever was a time to reflect on risk, and financial impact of risk, our ZLC is here to help. Please stay healthy, safe and reach out to our ZLC team, should you need anything at all.


Think back three months.  Most of us had never heard of the novel coronavirus. Now it is all we talk about – how to avoid it, how many have it, and what it is doing to our lives and the economy.  My three kids are all living in self-imposed quarantine and won’t even hike with us for fear we’ll get it!  We live in a new normal.

Our new normal also includes a lot of forecasting. In a world where toilet paper, disinfecting wipes and face masks are in short supply, economic and market projections are piling up. I must get about 10 letters a day and I’m sure you do too. So, with that in mind, I’ll keep this short.

We cannot tell you where the market will be tomorrow, next week, next month or next quarter.  Market timing is impossible, not just for us but for everybody.  Who saw the COVID shutdown? What we can tell you is we think there will be a bottom and we think holding investments in companies that can weather the storm will be profitable.  Our managers are invested in these assets. We think it is time to stay invested, and over the coming weeks and months to consider deploying any excess cash where risk tolerance is appropriate.

Here is what we know:

  • COVID-19 is still rising outside of China, with the world numbers hitting over 800,000 confirmed cases. Actual cases are probably much higher and the number of deaths continues to climb especially in Italy, Spain, France and the US. There is still no widely accepted treatment or vaccine, although progress is being made. There are some signs the growth curve may be flattening. Spain’s Foreign Minister says the curve is flattening with 6,400 new case on Monday, the lowest in two weeks (BBC News).
  • Nearly all of China’s major industrial companies have headed back to work (Wallstreet Journal).
  • World GDP is down and will be down for some time. Morgan Stanley has predicted significant US GDP loss in the second quarter of -30%, with significant re-growth in the third quarter of +29%.
  • The US Federal Reserve Bank is showing it is basically prepared to keep adding liquidity as needed to keep the economy going.
  • On Monday, oil prices have dropped to a 17-year low with West Texas Intermediate (WTI) going below US$20 and the Western Canadian Select (WCS) hitting US$3.82, a record low. These prices are devasting for Canada and especially for Alberta. On the plus side, TC Energy (formerly Trans Canada) gave the go ahead on its Keystone XL pipeline with backing from Alberta. The Canadian oil and gas sector rose today; iShares S&P/TSC Capped Energy Index was up 14%.
  • JP Morgan said Monday: “Risky markets should remain volatile as long as infection rates create uncertainty about the depth and duration of the COVID recession, but enough has changed fundamentally and technically to justify adding risk selectively. Most risky markets have probably made their lows for this recession, except perhaps oil and some EM currencies beset by debt-sustainability issues.”

Through all this, the investment team at ZLC Wealth continues to review all the data.  We don’t know when these trends will reverse and markets return to normal, but we know they will, and we will continue to manage portfolios that balance risk with opportunity for our clients.

Our staff are all working hard, although much of our activity is currently done remotely.  We have the technology to continue to open accounts, trade, and do all the things we need to do.

Let us know if you have any questions.
Best regards and be safe,

– Jon McKinney, President & Portfolio Manager, ZLC Wealth

Article reposted from ZLC Wealth’s March 31st 2020 Special President’s Letter.

DISCLAIMER: This newsletter is solely the work of the author for the purpose to provide information only. Although the author is a registered Investment as a Portfolio Manager at ZLC Wealth Inc. (ZLCWI), this is not an official publication of ZLCWI. The views (including any recommendations) expressed in this newsletter are those of the author alone, and are not necessarily those of ZLC Wealth Inc.  The information contained in this newsletter is drawn from sources believed to be reliable, but the accuracy and completeness of the information is not guaranteed, nor in providing it does the author or ZLCWI assume any liability. This information is not to be construed as investment advice. Your own circumstances have been considered properly and that action is taken on the latest available information. This newsletter is not and under no circumstances is to be construed as an offer to sell or the solicitation of an offer to buy any securities. This information is given as of the date appearing on this newsletter, and neither the author nor ZLCWI assume any obligation to update the information or advise on further developments relating to information provided herein. This newsletter is intended for distribution in those jurisdictions where both the author and ZLCWI are registered to do business. Any distribution or dissemination of this newsletter in any other jurisdictions is prohibited.  The rate of return shown is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the Fund or returns on investment in the Fund. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the offering memorandum or prospectus of the Fund before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all dividends and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Performance results are not guaranteed, values may change frequently and past performance may not be repeated. IMPORTANT INFORMATION: The above commentary may contain an update on certain funds offered through ZLC Wealth Inc. Returns are net of fees and include reinvested dividends.  The performance of the fund presented in this document may be for a different series of fund than the series that you hold in your account.  The performance of the series that you hold may be different than what is shown.  This information does not constitute an offer or solicitation to anyone in any jurisdiction in which such an offer or solicitation is not authorized, or to any person to whom it is unlawful to make such an offer or solicitation.  These products may not be appropriate for all investors.  Important information about the funds is contained in the offering documents which should be read carefully before investing. You can obtain these documents from ZLC Wealth Inc. Please speak to a ZLC Wealth Portfolio Manager or Representative to determine if these products are right for you.

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