Pandemic and portfolios, what’s new

Dear Clients, Colleagues, Friends,

Well, we have officially entered the Summer of The Year of COVID-19. If you think of the early portion of the year as being caught in a snowglobe that fell off a mountain, you might characterize these last three months as the roller-coaster ride through a dense and misty fog. 

Let’s take a quick look back: By the end of last year, the market was up 28%, reflecting a huge one-year increase, and stock prices indicated sustained optimism for 2020. By late February, the knowledge that coronavirus would impact the business of multinational companies triggered sharp declines in the stock market. By the middle of March, all of the broad-market gains from 2019 were lost.

But suddenly, a recovery began, and moved as quickly as the initial plunge. At yesterday’s close, while the S&P 500 was down about 7% for the year, it was still 20% higher than 18 months prior, at the start of 2019.  

This rapid rally has returned us to levels that indicate a fair amount of optimism among investors. Normally cycles like the one we have just experienced take anywhere from several quarters to multiple years to run their course. This time it was only weeks.

The rapid and significant changes we have seen this year have caused the investment landscape to shift from one that was starting to present solid buying opportunities to one that is now more neutral.

Today we are balancing our long-term confidence in the economy and financial markets with our knowledge that the uncertainties of the next six to 12 months are heightened by an unusually wide range of shorter-term issues—including the scientific and economic ramifications of COVID-19, the economic impact of the anti-racism movement, trade relations with China, and what will likely be a heated run-up to our presidential election in November.

These kinds of current events are often a source of short-term volatility and long-term opportunity. As always, we employ a proactive view, taking advantage of the volatility of the day with a long-term eye instead of reacting with the crowd. Throughout the coming months, we will buy when individual opportunities meet our disciplined criteria for risk and return—and reduce positions in your portfolios when prices reflect excessive optimism and increasing risk.

Our work for you is really akin to navigating a never-ending trail run, not a 5k or a sprint. We need to be aware of the tree roots, mud-holes, wild animals, and sketchy downhill patches, but keep our eyes on our longer-term health to deliver the endurance that will mean a successful finish for you. We have trained with discipline and executed our trail-run strategy well. And unlike what the world may have felt like back in late February, and then mid-March, at Two Point Capital we are not trapped inside a tilted snow globe or riding a rogue roller-coaster. We are running ahead on our own steam, at our own pace. 

As always, I am energized by and grateful for your confidence in the work we do for you.

Our company update

As of this week, the Finger Lakes Region of New York State has entered Phase 4, which allows for a continued reopening of businesses and services. With an abundance of caution, we continue to work primarily from home, with team members being careful to stagger any time in the office. We are currently meeting with clients via Zoom or Skype, and are finding that works relatively well for people.

Our plan is to continue with our virtual platform, while monitoring coronavirus case numbers in our area to determine a reasonable timeframe for reopening the office to our clients, partners, and friends. You will be the first to know. 

More action, more talk 

As you know, the last few months have been very busy ones on the investment front. But as planned, we have begun to address our online presence to make it easier to communicate with you as well as with prospective clients. We are starting with more activity on social networks like Facebook, Twitter, and LinkedIn.

Next week we plan to launch our blog, and while our primary focus will continue to be delivering our unique investment insight, we will strive for some light-hearted balance. We will kick it off with a two-part post on thriving in The Summer of COVID. Part I will focus on enrichment, and Part II on entertainment. Our mission is to share information and analysis that inspires, energizes, and maybe makes you think.  

Stay safe this summer!

This is our niece Maria, and she has a secret weapon for staying safe during family picnics on the patio. Read more about it.

This weekend is the 4th of July! How are you handling the shift to warmer weather and outdoor activities? We have been practicing safe ways to gather with small groups of family and friends, and would love to incorporate your ideas into ours, and share them on the blog. 

Send us your summer gathering ideas!

This summer, may you and your loved ones remain safe and healthy.

Jack McGowan, CFA
Founder and CEO

~ we would love to hear from you on this post and our blog in general ~

~ if you enjoyed our post, please share it ~


you might be interested…

Thanksgiving celebration with masks

Gratitude & Maybe Gravy: how to enjoy a COVID Thanksgiving

In this 2020 year of COVID, Thanksgiving may look much different than what we are accustomed to.

The surge in cases across the country means many of us are rethinking our holiday plans. It can be incredibly disheartening to think of missing visits from family and friends in order to protect loved ones. If you are foregoing the big family get-together this year, there are some creative options that can still make it a time to be grateful for. Here are some of the Two Point Capital Management team’s collective ideas.


Small but Mighty: the Matchstick Prize

Even as we celebrate professional standards discipline in our own practice, and within the human services sector, we recognize the crucial importance of discovering and nurturing the cutting-edge innovation that drives the next generation of solutions.

That’s why we are pleased to again be a sponsor of Causewave’s Matchstick Prize, which recognizes the Small but Mighty agencies helping our neighbors to live a richer life.


The Great Outdoors of the Western Mountain States ~Summer of COVID~

Well, if you’re in Montana, Colorado, Idaho or Wyoming, you likely know you are fortunate to have unparalleled access to some of the most breathtaking landscapes on the planet.

Here are a few recommendations for enjoying your natural assets a little bit more than you already do—if that’s possible! And for the rest of us, we are taking notes for when unfettered travel is possible again.


The Great Outdoors of Florida ~Summer of COVID~

If you caught our latest blog post, you read about the fact that spending time in the great outdoors helps improve your mental and physical well-being (click here if you missed it>>). And we offered some great get-out-and-enjoy-nature recommendations for beating the COVID doldrums. Well, we know it’s Florida-hot, but that doesn’t mean you can’t enjoy time in the outdoors with some cool activities. Here are a few recommendations to get you started:


Ditch the Doldrums in the Great Outdoors ~Summer of COVID~

Have you ever set your alarm for 5 am, thrown on a sweatshirt and hiked to a place where you can watch the sun rise and enjoy a thermos of coffee while the world wakes up? Or hiked a creek in sandals and stopped to watch the water just run over your feet, turn over rocks for crayfish or take pictures of flowers along the banks? Have you left your bedroom windows open so you can hear the peepers’ chorus as you fall asleep and the chickadees’ good morning as you wake up?

If this brings back fond memories of simpler, childhood days, it’s not too late to live them again.


Enjoy your weekends ~Summer of COVID~

Although we crave entertainment and a return to normalcy this summer, the persistence of COVID-19 means pause, restrictions, masks, hand-washing and antiseptic wipes. Despite some entertainment-related venues re-opening such as zoos, botanical gardens, and art galleries, some states require each operates at limited capacity. Some entertainment spaces like movie theaters, indoor shopping centers, and casinos remain closed in many areas.


Expand your inner horizons ~Summer of COVID~

Three-and-a-half months into COVID culture, six-foot spreads are still recommended, or even required. States that were opening up are closing some activities back down. We will spend more time alone or with many fewer people than we’re accustomed to seeing, especially in summer. This new way of living is a hard change, even with the occasional socially distanced patio picnic.

Black Lives Matter Protest, Martin Luther King Park, Rochester, NY, May 30, 2020

Clarity at the turning point ~thoughts on racism~

On the afternoon of Saturday, May 30, I marched. I was grateful for the right to protest, and unhappy that we had cause to do so. I joined my family, thousands of people in my community and across our nation and the world to stand up and be counted as an ally of Black and Brown people everywhere. The protest was Black-led, it was youth-led, it was peaceful, it was inspiring, it was as diverse as America.