Global Market Commentary – February 2020

Global equity markets saw their first major correction since late 2018. The Coronavirus outbreak that was largely downplayed over the last few months began spreading outside of mainland China.

The spread of the virus, which still has a relatively low mortality rate but is highly contagious, has disrupted manufacturing supply globally and also caused panic among investors, weighing on consumer demand for goods and travel. 

Stock markets have erased year-to-date gains, and all portfolios are now slightly negative for the year. However, by broadening our scope we observe that markets are still up over +27% since the beginning of 2018.

Our portfolios have exhibited the volatility we expected in designing them; namely, the more aggressive portfolios had the biggest swings, while our very conservative portfolios exhibited much more stability. Gold has also performed quite strongly, functioning as the safe haven hedge in portfolios.

Wahed continues to adhere to the the tested philosophy of investing with a long-term time horizon and cautions against reactionary responses to market sell-offs in attempts to time the the market. 

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