Our Investment Process During the COVID-19 Era

About ten months ago, I wrote an article that detailed our approach to investing. In the very first sentence of that article, I wrote: “I love the saying, ‘The more things change, the more they stay the same’ as it can apply to so many aspects of our lives.”

Woah… have things changed.

We are all working from home, dinner from Nite ‘N Gale is takeout-only, and investment markets have seen historic volatility during the last two months. Multiple “circuit breakers” were hit at the New York Stock Exchange, and — for a brief moment in time — the price of crude oil futures went negative. Working to support markets, has been the Federal Reserve and Congress, which have taken unprecedented steps during this pandemic.

Through all of this, I keep coming back to it: the more things change, the more they stay the same. With that in mind, I want to share an update on how our team of investment professionals has responded to the current market environment.

Our Investment Committee

The world might be turned upside down, but our process and approach to investing have not changed a bit. When our investment committee meets, the focus is still the same points that I detailed in the article last June.

  • Emphasis on portfolio construction and asset allocation
  • Continual oversight of strategies
  • Approving the use of new strategies, and terminating others
  • How to implement different strategies in client portfolios

So, while the foundational elements of our investment process have not changed, COVID-19 has changed three things: the cadence of our meetings, how we meet, and the specific topics of discussion.

In the past, our investment committee met once per month. During the COVID era, our committee has been meeting twice per week. This change in cadence reflects the sheer amount of fundamental data that this pandemic has generated.

Additionally, with our office being closed, these meetings now happen on a video conference, allowing our investment team to share their computer screens and discuss strategies and research.

Lastly, COVID-19 has changed the specific and very timely nature of the topics that we discuss. Below is a (very) abbreviated list of topics that we’ve covered during the last two months.

  • Recap of COVID-19 related strategy update calls
  • Review of Federal Reserve actions
  • Tax-loss harvesting strategies and the frequency of rebalancing
  • Summary of economic research from outside providers
  • Impact of low-interest rates on fixed-income investments

Importantly, our investment committee does not, and will never, make predictions about the direction of the markets. The last two months are further evidence that directional moves are not just out of our control — they are impossible to predict reliably. Our investment committee remains focused on what we can control, like how we construct portfolios and allocate assets on behalf of our clients.

Our Approach to Risk Management

Every ten or 20 years, there is an event that turns the world on its head. We haven’t needed to adjust our investment process, because we’ve had this reality in our minds all along. Through our investment process, we try to put these market events into perspective for our clients. It’s the reason why we don’t ask clients how much they want to make in the markets during our first client meetings — we ask them how they would feel if their portfolio declined in value.

Our clients’ unique tolerance for investment risk drives our portfolio construction process, and that commitment remains.

Final Thoughts

I would be lying if I said this wasn’t a stressful time for everybody. From the research that we’ve done, a lot of our fund managers are experiencing stressful times as well. However, by working so closely together, we can make sure that the investments we use are acting in line with expectations, even under stressful circumstances. Most importantly, we can be positioned for whatever the future brings, even though we don’t know what the future will be.

As I write this from my basement, sitting by myself, staring at a wall of artwork that was created by my daughters over the last two months, I realize that I’m actually more connected to our investment team than I ever have been before.


This article contains general information that is not suitable for everyone. The information contained herein should not be constructed as personalized investment advice. Reading or utilizing this information does not create an advisory relationship. An advisory relationship can be established only after the following two events have been completed (1) our thorough review with you of all the relevant facts pertaining to a potential engagement; and (2) the execution of a Client Advisory Agreement. There is no guarantee that the views and opinions expressed in this article will come to pass.

Strategic Wealth Partners (‘SWP’) is an SEC registered investment advisor with its principal place of business in the State of Illinois. The brochure is limited to the dissemination of general information pertaining to its investment advisory services, views on the market, and investment philosophy. Any subsequent, direct communication by SWP with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of SWP, please contact SWP or refer to the Investment Advisor Public Disclosure website (http://www.adviserinfo.sec.gov).

For additional information about SWP, including fees and services, send for our disclosure brochure as set forth on Form ADV from SWP using the contact information herein. Please read the disclosure brochure carefully before you invest or send money (http://www.stratwealth.com/legal).

Financial Planning
Cloudy Crystal Ball
As we start the new year, especially after a challenging 2022, the most frequent question we are asked is: What is your prediction for 2023? Admittedly, our crystal ball is cloudy. It always has been and always will be when it comes to short-term predictions. Still, there is no shortage of “experts” – supported by research, sophisticated models, and persuasive reasoning – that routinely broadcast what’s in store for the next twelve months. The harsh reality: it’s fool’s gold – entertaining but rarely actionable.
Read More
A Closer Look at Private Markets
As you are likely aware, ongoing volatility and rising interest rates made 2022 a very challenging year in the capital markets. We believe that this past year has highlighted the need for advisors to explore investment opportunities that exist beyond the traditional stock and bond markets. The private markets are one such opportunity set. In this article, we discuss what the private markets are, how these investments may fit into a diversified portfolio, and how we use them.
Read More
Current Events
What We Have Been Reading – Market Commentary & Beyond
Our team regularly reads articles from industry peers and trusted resources to stay up to date on financial markets. We enjoy reading about topics related to economics, investments, current events, and financial planning. In addition to circulating some of the best pieces internally, we thought our clients, partners, and friends might enjoy reading some of the same articles as us. We received great feedback on the articles we circulated in the first two quarters of 2022, so we wanted to follow up with some more! Here are eight recent pieces that our team members have read, along with some commentary on why we found the respective articles interesting.
Read More