{"id":1510,"date":"2020-03-05T18:39:00","date_gmt":"2020-03-05T10:39:00","guid":{"rendered":"https:\/\/www.syfe.com\/magazine\/?p=1510"},"modified":"2021-12-16T09:25:50","modified_gmt":"2021-12-16T01:25:50","slug":"putting-coronavirus-and-the-correction-in-context","status":"publish","type":"post","link":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/","title":{"rendered":"Putting Coronavirus And The\u00a0Correction In Context"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

Major US indices closed at all-time highs on February 19 as the market largely shrugged off any indication that the coronavirus would impact global financial markets. By February 28, South Korea, Italy and Iran had reported mounting cases of the coronavirus, sparking fears that the spreading virus would affect the global economy. The S&P 500 closed with its worst week since the 2008 financial crisis and markets worldwide were in the red. <\/p>\n\n\n\n

Days later, stocks rebounded sharply on 2 March and the Dow Jones Industrial Average surged 5.1%. The rally proved to be brief as stocks tumbled the very next day following the Federal Reserve\u2019s surprise interest rate cut. In a surprising twist, stocks yet again surged on 4 March as investors warmed to the Fed\u2019s emergency rate cut and reacted to former US Vice President Joe Biden\u2019s key primary victories during Super Tuesday. <\/p>\n\n\n\n

What does this roller coaster of market ups and downs show? It illustrates the impossibility of timing the market and the challenges of emotional investing<\/a>: selling when markets are falling, and paying too much attention to the short-term noise in the markets.<\/p>\n\n\n\n

What happens next? <\/strong><\/h3>\n\n\n\n

Will we see the market correction (generally defined as a market decline of more than 10%, but less than 20%) continue in the coming weeks? Or will we see yet another rebound? As events of the past week have shown, there is no way to say for sure.\u00a0<\/p>\n\n\n\n

While it is reassuring that the Fed seems to be proactively getting ahead of any weakness in economic data via the half a percentage point rate cut, the fact is that there is not much room for further cuts with interest rates currently hovering just below 1.25%. In Europe, short-term interest rates are already negative, so the European Central Bank has far less ammunition to lower interest rates. <\/p>\n\n\n\n

Although uncertainty around the economic implications of the coronavirus outbreak remains, early economic data<\/a> shows that the US economy\u2019s fundamentals remain strong. Governments worldwide, including the US, have also signalled a willingness to support their economies. Singapore has unveiled relief measures targeted at businesses most affected by the virus outbreak while Chinese policymakers have implemented a raft of measures to support its economy. Even so, markets could still experience bouts of short-term volatility ahead. <\/p>\n\n\n\n

How Syfe managed clients’ portfolio risk amid market volatility <\/strong><\/h3>\n\n\n\n

Syfe\u2019s dynamic risk management algorithm<\/a>, ARI, focuses on ensuring a client\u2019s portfolio risk is maintained within a designated risk corridor. ARI continuously monitors all portfolios and adjusts a portfolio if the risk level assessed significantly deviates from the client\u2019s chosen Downside Risk level.<\/p>\n\n\n\n

In other words, ARI does not react to price movements per se, but rather to forecasted market risk. A fall in the market will not trigger a rebalancing unless ARI detects a sustained increase in market volatility that threatens to breach a client\u2019s chosen Downside Risk level. <\/p>\n\n\n\n

During the worst days of the late February market sell-off, the rapid increase in market volatility prompted ARI to act by rebalancing client portfolios – reducing the proportion of higher risk equities and increasing the proportion of lower-risk bonds and gold – back to our client\u2019s target Downside Risk. <\/p>\n\n\n\n

By keeping portfolio risk from increasing<\/a> beyond a client\u2019s Downside Risk limit, ARI\u2019s rebalancing helps mitigate losses and ensures portfolios are more stable even if stock market prices continue to swing. When clients know that their portfolio risk will always be kept in line with their chosen Downside Risk level, they are less likely to react emotionally and instead, feel confident enough to stay invested throughout the volatility. It\u2019s worth noting that while the S&P 500 dropped roughly 10% during the SARS outbreak, it finished up more than 26% by year-end.<\/p>\n\n\n\n

Keep your long-term investment goals in mind <\/strong><\/h3>\n\n\n\n

Warren Buffet\u2019s two famous rules to investing are first, never lose money, and second, don\u2019t forget rule number one. Syfe believes that judicious risk management is key to helping investors earn better returns<\/a> in the long run by not losing money beyond their risk specification so that they can maintain their resolve to stay invested for the duration.\u00a0<\/p>\n\n\n\n

Our ARI algorithm is designed to manage risk such that investors can be certain, with a 97.5% probability, that they will not lose more than their chosen Downside Risk level in a given year. The longer you\u2019re prepared to stay invested, the greater the chance your investments will yield positive returns. In times of market volatility, keep your emotions in check, reassess your comfort level<\/a> with your chosen Downside Risk level, and stay invested. Our dedicated financial advisors are also on hand to provide guidance and support<\/a> to help you stay on track. 
<\/p>\n","protected":false},"excerpt":{"rendered":"

In times of market volatility, keeping your emotions in check can pay off. <\/p>\n","protected":false},"author":3,"featured_media":1511,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[16],"tags":[],"class_list":{"0":"post-1510","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-grow-wealth"},"acf":{"readingTime":null,"authorName":null,"authorThumbnail":null,"BLUE_TIER":null,"BLACK_TIER":null,"GOLD_TIER":null,"PRIVATE_WEALTH_TIER":null,"PRE_AML":null,"POST_AML":null,"NO_GLOBAL_PORTFOLIO":null,"NO_REITS_PORTFOLIO":null,"NO_EQUITY_PORTFOLIO":null,"NO_CASH_PORTFOLIO":null,"HAS_ADVISOR":null,"INVESTMENT_PORTFOLIO_AUM":null,"AFTER_AML_DATE":null,"AFTER_ACCOUNT_CREATED_DATE":null},"yoast_head":"\nPutting Coronavirus And The\u00a0Correction In Context<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Putting Coronavirus And The\u00a0Correction In Context\" \/>\n<meta property=\"og:description\" content=\"In times of market volatility, keeping your emotions in check can pay off.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/\" \/>\n<meta property=\"og:site_name\" content=\"Connect\" \/>\n<meta property=\"article:published_time\" content=\"2020-03-05T10:39:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-12-16T01:25:50+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2020\/03\/coronavirus-and-correction.png\" \/>\n\t<meta property=\"og:image:width\" content=\"836\" \/>\n\t<meta property=\"og:image:height\" content=\"635\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Syfe Singapore\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Syfe Singapore\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/\"},\"author\":{\"name\":\"Syfe Singapore\",\"@id\":\"https:\/\/www.syfe.com\/magazine\/#\/schema\/person\/8d955bc4210538fdf152e7e66c4b943c\"},\"headline\":\"Putting Coronavirus And The\u00a0Correction In Context\",\"datePublished\":\"2020-03-05T10:39:00+00:00\",\"dateModified\":\"2021-12-16T01:25:50+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/\"},\"wordCount\":798,\"publisher\":{\"@id\":\"https:\/\/www.syfe.com\/magazine\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2020\/03\/coronavirus-and-correction.png\",\"articleSection\":[\"Grow Wealth\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2020\",\"copyrightHolder\":{\"@id\":\"https:\/\/www.syfe.com\/magazine\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/\",\"url\":\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/\",\"name\":\"Putting Coronavirus And The\u00a0Correction In Context\",\"isPartOf\":{\"@id\":\"https:\/\/www.syfe.com\/magazine\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2020\/03\/coronavirus-and-correction.png\",\"datePublished\":\"2020-03-05T10:39:00+00:00\",\"dateModified\":\"2021-12-16T01:25:50+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#primaryimage\",\"url\":\"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2020\/03\/coronavirus-and-correction.png\",\"contentUrl\":\"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2020\/03\/coronavirus-and-correction.png\",\"width\":836,\"height\":635},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.syfe.com\/magazine\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Putting Coronavirus And The\u00a0Correction In Context\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.syfe.com\/magazine\/#website\",\"url\":\"https:\/\/www.syfe.com\/magazine\/\",\"name\":\"Connect\",\"description\":\"Helping you take charge of your financial future\",\"publisher\":{\"@id\":\"https:\/\/www.syfe.com\/magazine\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.syfe.com\/magazine\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.syfe.com\/magazine\/#organization\",\"name\":\"Syfe Pte Ltd\",\"url\":\"https:\/\/www.syfe.com\/magazine\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.syfe.com\/magazine\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2019\/05\/logo_black.png\",\"contentUrl\":\"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2019\/05\/logo_black.png\",\"width\":550,\"height\":240,\"caption\":\"Syfe Pte Ltd\"},\"image\":{\"@id\":\"https:\/\/www.syfe.com\/magazine\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.syfe.com\/magazine\/#\/schema\/person\/8d955bc4210538fdf152e7e66c4b943c\",\"name\":\"Syfe Singapore\",\"description\":\"Syfe is an investment platform offering managed portfolios, brokerage services, and cash management solutions to help investors build wealth for a better future. The Syfe SG content team comprises industry professionals with backgrounds spanning across wealth management, quantitative finance, global markets, personal finance, and more, and strives to provide thought leadership and timely analysis to readers.\u00a0\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Putting Coronavirus And The\u00a0Correction In Context","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/","og_locale":"en_US","og_type":"article","og_title":"Putting Coronavirus And The\u00a0Correction In Context","og_description":"In times of market volatility, keeping your emotions in check can pay off.","og_url":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/","og_site_name":"Connect","article_published_time":"2020-03-05T10:39:00+00:00","article_modified_time":"2021-12-16T01:25:50+00:00","og_image":[{"width":836,"height":635,"url":"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2020\/03\/coronavirus-and-correction.png","type":"image\/png"}],"author":"Syfe Singapore","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Syfe Singapore","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#article","isPartOf":{"@id":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/"},"author":{"name":"Syfe Singapore","@id":"https:\/\/www.syfe.com\/magazine\/#\/schema\/person\/8d955bc4210538fdf152e7e66c4b943c"},"headline":"Putting Coronavirus And The\u00a0Correction In Context","datePublished":"2020-03-05T10:39:00+00:00","dateModified":"2021-12-16T01:25:50+00:00","mainEntityOfPage":{"@id":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/"},"wordCount":798,"publisher":{"@id":"https:\/\/www.syfe.com\/magazine\/#organization"},"image":{"@id":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#primaryimage"},"thumbnailUrl":"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2020\/03\/coronavirus-and-correction.png","articleSection":["Grow Wealth"],"inLanguage":"en-US","copyrightYear":"2020","copyrightHolder":{"@id":"https:\/\/www.syfe.com\/magazine\/#organization"}},{"@type":"WebPage","@id":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/","url":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/","name":"Putting Coronavirus And The\u00a0Correction In Context","isPartOf":{"@id":"https:\/\/www.syfe.com\/magazine\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#primaryimage"},"image":{"@id":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#primaryimage"},"thumbnailUrl":"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2020\/03\/coronavirus-and-correction.png","datePublished":"2020-03-05T10:39:00+00:00","dateModified":"2021-12-16T01:25:50+00:00","breadcrumb":{"@id":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#primaryimage","url":"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2020\/03\/coronavirus-and-correction.png","contentUrl":"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2020\/03\/coronavirus-and-correction.png","width":836,"height":635},{"@type":"BreadcrumbList","@id":"https:\/\/www.syfe.com\/magazine\/putting-coronavirus-and-the-correction-in-context\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.syfe.com\/magazine\/"},{"@type":"ListItem","position":2,"name":"Putting Coronavirus And The\u00a0Correction In Context"}]},{"@type":"WebSite","@id":"https:\/\/www.syfe.com\/magazine\/#website","url":"https:\/\/www.syfe.com\/magazine\/","name":"Connect","description":"Helping you take charge of your financial future","publisher":{"@id":"https:\/\/www.syfe.com\/magazine\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.syfe.com\/magazine\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.syfe.com\/magazine\/#organization","name":"Syfe Pte Ltd","url":"https:\/\/www.syfe.com\/magazine\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.syfe.com\/magazine\/#\/schema\/logo\/image\/","url":"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2019\/05\/logo_black.png","contentUrl":"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2019\/05\/logo_black.png","width":550,"height":240,"caption":"Syfe Pte Ltd"},"image":{"@id":"https:\/\/www.syfe.com\/magazine\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.syfe.com\/magazine\/#\/schema\/person\/8d955bc4210538fdf152e7e66c4b943c","name":"Syfe Singapore","description":"Syfe is an investment platform offering managed portfolios, brokerage services, and cash management solutions to help investors build wealth for a better future. The Syfe SG content team comprises industry professionals with backgrounds spanning across wealth management, quantitative finance, global markets, personal finance, and more, and strives to provide thought leadership and timely analysis to readers.\u00a0"}]}},"jetpack_featured_media_url":"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2020\/03\/coronavirus-and-correction.png","jetpack_sharing_enabled":true,"category":"Grow Wealth","authorName":"Syfe Singapore","thumbnail":"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2020\/03\/coronavirus-and-correction-150x150.png","featuredImage":"https:\/\/www.syfe.com\/magazine\/wp-content\/uploads\/2020\/03\/coronavirus-and-correction.png","_links":{"self":[{"href":"https:\/\/www.syfe.com\/magazine\/wp-json\/wp\/v2\/posts\/1510","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.syfe.com\/magazine\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.syfe.com\/magazine\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.syfe.com\/magazine\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.syfe.com\/magazine\/wp-json\/wp\/v2\/comments?post=1510"}],"version-history":[{"count":4,"href":"https:\/\/www.syfe.com\/magazine\/wp-json\/wp\/v2\/posts\/1510\/revisions"}],"predecessor-version":[{"id":1516,"href":"https:\/\/www.syfe.com\/magazine\/wp-json\/wp\/v2\/posts\/1510\/revisions\/1516"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.syfe.com\/magazine\/wp-json\/wp\/v2\/media\/1511"}],"wp:attachment":[{"href":"https:\/\/www.syfe.com\/magazine\/wp-json\/wp\/v2\/media?parent=1510"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.syfe.com\/magazine\/wp-json\/wp\/v2\/categories?post=1510"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.syfe.com\/magazine\/wp-json\/wp\/v2\/tags?post=1510"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}