Market Volatility Spikes to Record Highs: Market Commentary from Cabana’s CEO – March 16, 2020

5 months ago

  • Share this:

U.S. and international equity markets dropped 11% just today and are down almost 20% this month alone. Year to date, the S&P 500 is down more than 25%. COVID-19 started in January as something that had the remote possibility of causing problems here in the United States. Today, less than three months later it has resulted in a near shut down of the entire country. Colleges are closed. Schools are closed. The NCAA tournament, as well as all other major sporting events are cancelled. Broadway is shut down. Bars and restaurants across the nation are closed. Travel internationally has been halted. Domestic flights have been slashed by as much as 50%. Major companies are working remotely. People are self-quarantining in their homes.

Never in our country’s recent history has something like this occurred. Maybe never in our entire history. This is truly a black swan event. How long it takes the medical issue to resolve is anyone’s guess, but the damage to our economy is certain. Airlines, leisure, retail and the energy sectors are going to feel real pain and solvency will become an issue if conditions persist. We have talked many times about markets being predictors, as well as aggregators, of important data. It appears markets got it right beginning in late February when this threat was perceived as being more than just a threat. I mentioned in a Special Report published on February 29, 2020 (which can be easily accessed on our blog at that investors’ perception can quickly become reality. That is now firmly the case.

We received the first evidence today of the future economic ramifications and it isn’t pretty. The New York Fed Empire Manufacturing Index dropped 34.5 points, to the lowest level since 2009. We are at the point where asset preservation should be at the forefront of everyone’s mind. This too shall pass and the key going forward will be to have avoided large (perhaps insurmountable) losses. No one will get through this unscathed, but we want to make sure we keep our limbs attached. A large part of doing just that is having a process in place before this type of selloff occurs. We talked earlier this month about also having perspective to take a step back and remember that we are investors, not traders. There is a big difference. True investing is all about limiting losses and staying invested for when the market turns again. It is as simple as that.

A PDF of this week’s commentary is available at the following link:


This material is prepared by Cabana, LLC(d/b/a “Cabana Asset Management” & “Cabana Retirement Solutions”) and/or its affiliates (together “Cabana”) for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed reflect the judgement of the author, are as of the date of its publication and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Cabana to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Cabana, its officers, employees or agents.

This material may contain ’forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy. All investment strategies have the potential for profit or loss. All strategies have different degrees of risk. There is no guarantee that any specific investment or strategy will be suitable or profitable for a particular client. The information provided here is neither tax nor legal advice. Investors should speak to their tax professional for specific information regarding their tax situation. Investment involves risk including possible loss of principal.

Cabana LLC, dba Cabana Asset Management (“Cabana”), is an SEC registered investment adviser with offices in Arkansas, Texas and Colorado. Cabana only transacts business in states where it is properly registered or is exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. Additional information regarding Cabana, including its fees, can be found in Cabana’s Form ADV, Part 2. A copy of which is available upon request or online at

Financial Advisor magazine is a monthly financial services publication that delivers market information, strategies and trends to help advisors better serve their clients. Registered Investment Advisers founded in 2015 or before with minimum AUM of $300 million were ranked based on number of clients in 2018, percentage growth in total percentage assets under management from year end 2017 to 2018, and growth in percentage growth in assets per client during the same time period. The Financial Advisor Magazine 2019 Top 50 Fastest-Growing Firms ranking is not indicative of Cabana’s future performance and may not be representative of actual client experiences. Cabana did not pay a fee to participate in the ranking and survey and is not affiliated with Financial Advisor Magazine. Working with a highly-rated advisor also does not ensure that a client or prospective client will experience a higher level of performance. These ratings should not be viewed as an endorsement of the advisor by any client and do not represent any specific client’s evaluation. Visit or for more information regarding the ranking.