Each week, Herb Morgan, EMA's Founder, Senior Managing Director and Chief Investment Officer, provides an Economic and Market Commentary that summarizes market activity, news and events from the previous week.

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Off Cycle Commentary 04-02-2020 – Herb Morgan

April 2, 2020 Commentary , Industry News

By Herb W. Morgan, III, Efficient Market Advisors

Dear Investors & Financial Advisors:

Over the last few weeks, as the coronavirus has entered our lexicon, I’ve spent more and longer time on phone calls than ever before. Balancing the need to be in the weeds of managing the money with the needs of meeting client expectations for communication and reassurance have made for long days. This is the period where I both earn my keep and potentially add value to client portfolios. In years like 2019 when markets went straight up without a hint of volatility, I was like the Maytag repairman. And, my ability to add value to a portfolio was limited.
Continue Reading Here

Economic & Market Commentary- 03-23-2020 Herb Morgan

March 23, 2020 Commentary , Industry News

By Herb W. Morgan, III, Efficient Market Advisors

Dear Investors & Financial Advisors:

At this point, the capital markets have moved beyond the potential impacts of the spread of the coronavirus and its ability to strain the capacity of the healthcare system. Many are actively questioning whether the intentional quasi shutdown of the US economy may do more harm than the coronavirus itself. Estimates vary widely about the impact to second quarter GDP but suffice it to say, the economy will contract at a double-digit rate. Even with all the recessions, wars, and natural disasters we’ve experienced there has yet to be a potential contraction this significant since the Great Depression. Continue Reading Here

Off Cycle Commentary -Extremism As Defense From Volatility Is No Virtue – 03-11-2020 – Herb Morgan

March 11, 2020 Commentary , Industry News

By Herb W. Morgan, III, Efficient Market Advisors

“Be Fearful When Others Are Greedy and
Greedy When Others Are Fearful”
-Warren Buffett

With the Coronavirus unfortunately reversing the recent decline in active cases from late February and accelerating the number of net-new daily cases, it’s time to ask what investors might consider doing. Or importantly, avoid doing.

It almost goes without saying, that resisting the urge to change strategy, sell, go to cash etc., is a critically important consideration. While there may yet be more bottoms to achieve for this market, there will also no doubt be furious upside rallies based on policy anticipation, comments from leaders, news reports and the like. One of which, will ultimately be the bottom. Extremism as defense from volatility is no virtue! Continue Reading Here

Off Cycle Commentary -Viruses & Economic Impact – 03-09-2020 – Herb Morgan

March 9, 2020 Commentary , Industry News

By Herb W. Morgan, III, Efficient Market Advisors

Viruses & Economic Impact

What started as a Coronavirus Correction has now spilled over into credit. At this point we just don’t know how much impact the virus will have on the economy. To be sure, there will be an impact. What is particularly frustrating is that this all comes as economic data was accelerating into the new year.

We just had back-to-back months (January & February) of 273,000 gains in employed Americans. Weekly claims remain low and the overall unemployment rate was at 3.5%. We had strong auto and retail sales. All of this occured against the backdrop of a growth friendly policy agenda and an accomodative central bank. Continue Reading Here

Off Cycle Commentary – Nervous Energy Is A Great Destroyer of Wealth – 3-6-2020 Herb Morgan

March 6, 2020 Commentary , Industry News

By Herb W. Morgan, III, Efficient Market Advisors

Nervous Energy is a Great Destroyer of Wealth
-Fayez Sarofim

The financial markets don’t like uncertainty. The current Coronavirus outbreak is no exception, and many investors are tempted by an impulsive desire to “do something.” In our view, this urge is part of the instinctual “fight or flight” in our DNA.

But in times of volatile markets, the best move for long-term investors is often no move at all. While they’re not exact parallels, the stock market responses to the SARS Coronavirus in 2003 and the Zika virus in 2016 offer useful lessons. In both cases, investors who sold on bad news and falling prices missed significant rebounds that very shortly had stock markets back to prior levels. In fact, we believe that adding to portfolios on significant drawdowns or rebalancing portfolios to intended targets can lead to enhanced returns if markets ultimately rebound and achieve new heights. Continue Reading Here

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