Covington Investment Advisors, Inc. Blog

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An Update on Market Events (March 25, 2020)

Peak in Global Infection Rate Worldwide infection numbers continue to grow as most of the world remains in shutdown.  The service sector has been especially badly affected, with consumer facing industries bearing the brunt of the social distancing measurements. Although domestic health centers are strained, they have not been overrun such as those in Italy or Wuhan, China. It’s not all doom and gloom, positive signs are popping up in pockets across the world. In an encouraging sign, Italy has reported three straight days of new cases below the peak of 6,557 which occurred on March 21st. Saturday was 16 days since Italy took more drastic measures of social distancing such as shutting schools, universities, and non-essential businesses. China reached peak reported numbers 12 days after taking such measures. This would mean that we can use this 12-16 day window as a rough guide for a peak in the United...
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Wash Your Hands and Beware the Coronavirus Phishing Scam!

Day to day the media is reminding you to wash your hands and avoid large crowds as new coronavirus cases pop up across the world. What they should also be discussing is what else you should be concerned about; your cybersecurity.  Global disasters such as the coronavirus creates a golden opportunity for fraudsters because the whole world is informed and constantly trying to learn more about said disaster. This causes a greater potential for impulse clicking on suspicious emails or attachments. The fraudsters know this.  Starting in February 2020, a new coronavirus phishing scam has popped up in the United States. So, not only do you have to worry about the coronavirus outbreak hitting your area but now you must be on the lookout for the latest e-mail scam! These scam artists are trying to prey on the fear of the outbreak, hoping that you’ll impulse click on their seemingly...
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An Update on Market Events

Peak in Global Infection Rate Cases from around the globe continue to grow as widespread testing is being rolled out. To track the trajectory of the virus we are watching how fast the infection grows in a country after the number of cases exceed 100. China began to stabilize after roughly 36 days. When excluding Hubei, the epicenter of the Virus outbreak, this stabilization came even earlier at around 26 days. Although we try using other countries that are further along in their timeline as precedents it is important to keep in mind that not all countries are following the same trajectory. Italy, for example is experiencing rapid spread of the virus stemming from cultural norms such as tight living conditions and an aging population. South Korea has already flattened their curve by extensive testing and quarantine measures.  Coordinated Stimulus Over the weekend the senate failed to come together on...
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Virus Pandemic Update

A Peak in Global Infection Rates This is the most important factor for sensing a market bottom but also the most difficult to predict because of the uncertain nature of viruses. Using available data and models we can estimate the timeframe that it takes for a country to reach its peak infection rate and then flatten out. Many governments around the world believe the virus will peak in June or July but using China as an example we believe that peak could occur even earlier as long as countries take the necessary precautions to curb the spread of the virus. Every country has different circumstances. Italy for example has not been effective at stopping the virus and an aging population has made the mortality rate especially high. On the other hand, South Korea has shown the ability to stem the spread of the virus in an outstandingly quick timeframe through...
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How Do We Navigate This Unprecedented Market Environment?

How do we navigate this unprecedented market environment? While the circumstances of the Coronavirus/Oil War are extraordinary we are in the midst of a major crisis. Simply put, in a crisis there are certain actions we must adhere to as long-term investors until this crisis passes. We use historical precedents as a guideline, but every crisis is different. What isn’t different is how we approach them.  This is not a time to be frequently trading long term positions locking in losses under irrational circumstances. Once the virus hysteria passes, events and gatherings return to normal, and fiscal stimulus is launched by the government the market will stabilize. The stock market rewards investors who are long term oriented. While others are selling their shares out of panic, it creates an opportunity for those who want to buy a stake in those companies with the mindset of a long-term part-owner. Stocks of...
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Covington Investment Advisors, Inc.
301 E. Main Street
Ligonier, PA 15658
Phone: 724-238-0151
Fax: 724-238-0148
Email: covington@covingtoninvestment.com