Stocks fell rapidly and indiscriminately in March as investors realized that unprecedented shutdowns to combat the spread of the deadly coronavirus would bring economic activity to a grinding halt and put millions out of work.
The S&P 500 lost -12.5% in March, the Dow fell -13.5%, while the Nasdaq 100 lost least, down -7.3%. The small-cap Russell 2000 Index plunged -21.5%.
Bonds were also unusually volatile in March, particularly corporate bonds. Click here for our take on the bond market.
Nowhere to hide from 2020 losses
It was one of the worst quarters in US stock market history with the S&P 500 down -19.4% for the first quarter, and the Dow -22.5% through March 31st The small-cap Russell 2000 plunged -30.7%, its biggest quarterly loss going back to 1979.
Foreign stocks were also down. The MSCI EAFE lost -23.0% as European shares plunged, and the MSCI Emerging Markets Index fell -23.9%.
Markets have already priced in a huge drop in corporate earnings and the case can be made that risk assets are now cheap relative to historically normal valuations. But the decline may not be over yet.
Massive government spending and monetary stimulus helped lift US stocks from a rout that had reached -33%, and yet the hit to the economy is shaping up to be monumental. Policymakers are making an unprecedented bid to buy time for the economy and an effort to keep the recession shallow.
What can fund investors do now?
- Take a minute to recover. March was one of the craziest months in the markets, and it can be overwhelming to try to take in so much change in a short amount of time.
- Try to respond to the 2020 sell-off in a measured way that’s consistent with your goals, such as dialing down risk rather than selling in a panic.
- Focus on what you can control and what helps you stay on track.
- Remember that your investment horizon is longer than this quarter or even this year.
- Get help if you need it.
Many people turn to advisors in times like this to help them move forward. You don’t have to do try to manage 2020's changing markets alone. Click here if you’d like to set up a time to talk with a FundX advisor.