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February 29, 2020 | Memo

On February 12, 2020, the popular U.S. stock market index, the Dow Jones Industrial Average, usually referred to as “the Dow”, reached an all-time high: 29,551.  It first crossed 1,000 in 1972, 10,000 in 1999, and 20,000 in 2017.  But, it hasn’t crossed 30,000.  Yet.

Fear over Coronavirus has chased investors to the sidelines and on February 27th, after a record 1,190 point drop, the Dow technically entered what is referred to as a “correction”, a fall exceeding 10%.

The last correction was in 2018 when investors worried about a U.S.-China trade war.  The 2015 correction was caused by investors worried about slowing growth in China and Greek debt.

This is the history of stock markets: economic growth and corporate profits push stocks up, and every two or three years investor fears push stocks down.

None of us know how serious Coronavirus is.  That’s the nature of global events and fear.  Investors imagine a catastrophe will slow economic growth and wipe out corporate profits.

This is the recurring pattern of the past 250 years, ever since the beginning of the Industrial Revolution and the great enrichment of the world.  A trend we believe is still in place.

At Bluestone Financial our goal remains constant: calmly securing wealth in the long-run, together with our clients.

Thank you.

This memo was prepared solely by Terry and Patty Rempel who are registered representatives of FundEX (a member of the Mutual Funds Dealers Association of Canada and the MFDA Investor Protection Corporation). The views and opinions, including any recommendations, expressed in this memo are those of Terry and Patty Rempel. Bluestone Financial is a personal trade name of Terry and Patty Rempel.

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