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The first quarter was challenging for risk assets in general as investors wrestled with the economic impacts of the COVID-19 driven shutdown. The S&P 500 was down -20% in 1Q for the biggest quarterly decline since 2008.

The first quarter was challenging for risk assets in general as investors wrestled with the economic impacts of the COVID-19 driven shutdown. The S&P 500 was down -20% in 1Q for the biggest quarterly decline since 2008.

I don’t remember a time when there was more uncertainty about the economy, equity markets, debt markets, and with interest rates, volatility, and currencies. There is no comparison!

I don’t remember a time when there was more uncertainty about the economy, equity markets, debt markets, and with interest rates, volatility, and currencies. There is no comparison!

After several tumultuous weeks, global financial markets continue to be severely impacted by coronavirus contagion. In these unprecedented times, no one can say that they have lived through market conditions quite like the ones we are currently experiencing.

It’s really bad out there in small business land as witnessed by the above chart. Unemployment has gone parabolic and there’s likely a bit more to go to potentially have 10%+ unemployment in the U.S. The rapid move from <3.5% unemployment to >10% unemployment will be the fastest in history.

We believe there will be long-lasting economic and business ramifications long after the Covid-19 pandemic is resolved. Along the way governments will be on the hook for massive amounts of stimulus dollars to keep their economies running and in global financial markets, there will be companies and sectors that benefit and those who are adversely impacted by the deadly virus.

Even though there are many unknowns, we believe there to be extremely low credit risk to many bonds that we can buy in this “once in a life-time opportunity” for the second time in my 15-year career.