We hope that you and your loved ones are continuing to stay safe and well.
As the quarantine continues and some restrictions are beginning to ease, we wanted to give our clients an update on Condor’s current work-from-home set up, our office plans for going forward, and our thoughts on the market.
Condor Capital and its staff continue to operate from home. Our office has been running smoothly in this capacity, with only some processing delays at our custodians that seem to be lessening. We continue to invest in infrastructure to support our employees and business as usual.
When planning the reopening of our office, we will take our guidance from the state of New Jersey as to the appropriate time for our physical location to open. Social distancing is not easily achievable in our current office environment, and we do not want to put any of our employees at risk if we open our office earlier than recommended. Additionally, we want our office to be a collaborative setting, and therefore need an environment that fosters communication. If our employees need to wear face masks for protection, they are less likely to approach one another in the office and our goal of a collaborative employee team suffers. As a result, we prefer not to open the office if wearing masks is mandated for protection and expect that we will not be on the early end of the office-opening timeframe. When we are able to return to the office, we will be taking extra precautions to ensure the health and safety of everyone. Some of those solutions will include the installation of hand sanitizer stations and hands-free door opening mechanisms.
In an effort to further protect both our employees and our clients, we will not be scheduling in-person meetings immediately upon our return to the office. However, we are now, and will remain, fully equipped for Zoom meetings or telephone conference calls. We do anticipate being able to conduct in-person meetings again in the future and will notify our clients when we feel it is safest for all involved to do so.
Until the time when we can reopen our office, the best way to submit documents or items for our review is via email or the secure messaging system on our portal. However, if there are sensitive documents or other items that need to be sent physically, our current setup remains the same: USPS mail whenever possible, with UPS labels available upon request for urgent or sensitive documents. The delays we were experiencing with USPS mail have improved somewhat.
As for the markets, it has been an extremely volatile year. We witnessed the all-time high in the market on February 19th, followed by a rapid move to the downside that bottomed out on March 23rd. We have recovered much of the market losses since the March 23rd low and while it’s possible that we retest the market low, massive stimulus measures from the federal government and an unprecedented injection of liquidity into the financial system from the Federal Reserve have helped to backstop financial markets. Additionally, as states and communities begin to reopen, markets are looking ahead toward a return to some level of normal, even if the new normal looks somewhat different. For the year-to-date, large-cap domestic stocks, as measured by the S&P 500 Index, are down close to 6% for the year and back to levels last seen in October of 2019. While small-cap and international stocks have fallen further than the S&P 500 Index, they too have staged a significant recovery from their lows.
As we look ahead, the recovery is likely to be uneven as ongoing precautions and changes in consumer behavior create winners and losers. For example, travel-related industries such as cruise lines and air travel are likely to face ongoing difficulties, while sectors such as technology and healthcare will benefit. Additionally, the economic impact of the virus is likely to hit international economies harder than the U.S., and larger companies will have an easier time accessing the liquidity that has been injected into the financial system. In the nine months preceding the virus, we rebalanced client portfolios to take profits and maintained low exposure or reduced positions in small-cap and international stocks, as well as high-yield and bank loan funds (all riskier areas of the market). This positioning allowed us to be opportunistic during the downturn by adding to or initiating positions in attractive areas that had fallen and rebalancing client portfolios to add to equity exposure. The economy is likely to look different going forward and we are continuously assessing the ways that this will affect our clients’ portfolios and making changes accordingly.
Our employees have worked tirelessly through this time to provide you with the same high level of service that our clients are used to receiving from us. If you have any issues, please do not hesitate to reach out to us. We believe that the best compliment we can get from a client is a referral to a family member or friend, and so we continue to be grateful and appreciative of the referrals you have given us.
We hope that you and your families have a wonderful, safe summer.
