Right now a lot of us feel more uncertain than we ever have. We’re worried about a lot of things: our health, our jobs, our investments.
When it comes to health, I have the same anxiety as everyone else. I’m heartened to see the whole world doing all they can to protect themselves and their loved ones. At Dimensional, we’re working from home for the first time, and I’m floored by everyone’s effort in making this huge shift such a success. We’re dedicated to protecting the health of our employees as well as the assets of our clients.
Let’s talk about the economy. The threat of job loss is a tremendous stress on families. There’s an old saying that a recession is when your neighbor loses his job; a depression is when you do. Since we don’t know how long this is going to go on, we can’t say exactly how big the impact will be on the economy and on people’s livelihoods. But we know people who will be hurting. We have to take care of each other.
Now on to the investment part of this crisis, which I actually know something about. The last few weeks have been a double whammy. Much of the world is staying home and can’t work. As a result, expected future cash flows are going down. Meanwhile, uncertainty about earning prospects has gone up. So of course there has been a decline in stock prices.
If you know me, you know I'm not one to easily get talked out of my hard-earned beliefs. At Dimensional, in this market downturn as in previous market downturns we’ve never given up on doing what we felt was right. And we're not going to give up on doing what's right for the business and for each other, as we rebuild our economy together.
I often say that the ideas upon which we built this firm are bigger than the firm itself. Well, now I want to say that the values behind this firm are just as important as the ideas. Conviction, consistency, resilience and collaboration pushed us through a challenging beginning into a time of great success. And there's no reason to expect that it won't happen again.