Investment insights from Capital Group
Capital Group CEO Tim Armour shares his view on the global spread of COVID-19, the resulting market volatility and how our investment team is responding to these challenges.
Tim Armour: Hello, this is Tim Armour, CEO of the Capital Group. I’d like to start by offering my best wishes to you and your loved ones during this difficult period. And let me share with you how Capital is responding to the global spread of COVID-19 and this market environment.
While this virus is new to the world, market volatility is not. We have seen several viral outbreaks and market disruptions in the past, and markets have always rebounded. It’s worth remembering that this turbulence is not just from the virus but also reflects uncertainty about the U.S. presidential election and the oil price war that just started.
In my 37 years of experience, I’ve been through several difficult periods, the most recent being the Great Financial Crisis in 2008 and 2009. While they were all different, one thing is always the same: they feel terrible as you’re living through them. But I believe that markets, and great companies, will get through this and rebound.
Today people are scared and concerned because it’s unclear how this virus will play out. That’s understandable. One thing we know from experience is that fear and uncertainty are the enemy of successful investing, causing us to do the wrong thing at the wrong time. While it can be difficult, the key is to look through the current situation and stay the course by sticking to your long-term plan. Ultimately, that long-term view should be rewarded.
In our analysis of the U.S. economy, we are already seeing signs of a slowdown, and a recession has become increasingly likely. I believe eventually the spread of the virus will slow down and people will get back to normal, as will markets.
On the positive side, the U.S. economy remains among the most resilient in the world. It has a history of bouncing back from adversity. Interest rates are low, and the decline in oil prices should further support the consumer and businesses. What’s more, in China, Hong Kong and Singapore where they’ve been dealing with this virus over the past two months, the spread appears to have peaked. People are slowly returning to a less disruptive life and business environment. We expect that pattern to happen here in the U.S and Europe as well.
Rest assured that our more than 350 investment professionals in offices around the world continue to do what they have always done: analyzing companies and bonds and making real-time judgments about where they see potential long-term value.
We believe this situation, while disruptive for all of us, highlights the strengths of Capital Group’s investment process. Our deep fundamental research, global perspective and long-term view have helped our investment portfolios hold up well in times like these. We will continue to do our very best to provide you with a smooth and less volatile experience than the broader markets.
At times like these, my best advice is to stay focused on your long-term goals and stay the course. Again, my experience tells me that markets will rebound and life will return to a more normal state.
We’re committed to doing everything we can do to deliver for you in the future. On a final note, I wish you and your family remain safe and well during this period.
Disclosure: American Funds Distributors, Inc., member FINRA.
Frequently asked questions: Here is some information you may find helpful.
What hours are your service teams available?
Our phone teams are available as usual – from 8 a.m. to 7 p.m. EST at (800) 421-4225. Given current market volatility, wait times may be longer than normal. We appreciate your patience and understanding. As always, you can access our services via our website.
What steps are you taking to ensure your business continues to operate effectively during this period?
Our business is fully operational and stable. Across various parts of Capital, we have instituted work-from-home protocols that allow us to serve you and help keep our associates and their families healthy. This has allowed our key business processes to remain uninterrupted. We have equipped our client-facing associates with robust video and phone technologies to remain visible, fully accessible and dedicated to serving your needs through this period.
How should I (or my clients) feel about your investment strategies in this environment?
At Capital Group, our investment process features a multiple manager system that seeks to provide a smoother ride for investors with less volatility than the overall markets. Our investment experience spans nine decades and is designed to weather all kinds of market cycles. Our deep fundamental research, global perspective and long-term view have helped our investment portfolios hold up well in times like these. These characteristics have helped us to pursue long-term superior results.
I’m worried about my investments. What should I do?
Today, many people are scared and concerned because it’s unclear how current events will unfold. That’s understandable. One thing we know from experience is that fear and uncertainty are the enemies of successful investing, causing many investors to do the wrong thing at the wrong time. While it can be difficult, the key is to look through the current situation and stay the course by sticking to your long-term plan. When you look back through previous periods of market swings, the long-term view has been rewarded.
How can I learn more about the insights and outlook your investment professionals have on the current markets and economy?
Our volatility team is delivering daily insights and weekly webinars designed to give you exposure to the thinking across the vast breadth and depth of Capital’s investment professionals. You can access these services at capitalgroup.com.
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American Funds Distributors, Inc., member FINRA.
This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.
Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.