Early in the morning on March 9th, after careful deliberation and examination of the likely outcomes of the rapid expansion of the Novel Corona Virus - and, in particular, the likely impact upon the global economy, PARAGON's Investment Committee decided to implement RECESSION PROTOCOL™ immediately.  This means that we evacuated all of our clients out of the stock market and into safer assets such as treasuries, investment grade bonds, and cash.

A wise client who specializes in risk management said something to me last week that continues to ring in my ears... "Why risk a lot to gain a little?"

I thought he had a very good point.

You, our valued clients, have trusted us with their life savings, which is a responsibility that we take very seriously. Our first and most important responsibility is not to lose the decades of hard work and sacrifice that your life savings represent.

It is our opinion that this threat to our economy and to our retirement nest eggs is very real, and the outcome is highly dependent upon decisive actions by the governments that run our economy. Those of you who have been with us for a long time know I usually face market volatility with steely-eyed resolve and try my best to coach the rest of you (sometimes bluntly) to hang in there so you can get the returns you dearly paid for with what can only be described as suffering while the market whipsaws back and forth in a seemingly random fashion.

For additional information on the spread of the virus and potential outcomes, here are some resources:

• Coronavirus COVID-19 Global Cases by the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (JHU)

• Worldometer Tracking

• A virologist and former White House advisor's even handed, respectful take

Every market correction has some sort of catalyst that sets it off and the media typically sensationalizes it for their own gain. However, I believe that this catalyst has the potential to be very different.

The reality we now know is that this new Coronavirus is highly contagious and is 10 times deadlier than the seasonal flu many of us get. Many people will get it and have no symptoms at all; others will get it and have mild symptoms but will spread it long before they even get those. Generally only the oldest and weakest of us are at risk of death - but that is enough be highly disruptive to the economy - and the markets.

As we track the spread of this virus, we note that the countries that have had the most success containing and mitigating the spread of this virus are the ones that have implemented drastic - even draconian measures, which are highly disruptive to their societies and their economy. China, to their massive credit, chose to bite the bullet, take their medicine, and shut down virtually their entire manufacturing economy. Singapore, Hong Kong, Japan, and a few others followed suit and seem to have this virus under control. Italy and South Korea waited too long and now have had to institute massive quarantines of millions of people - and are barely getting control of the situation. Other countries - in particular, developed countries within Europe, such as France and Germany, have not instituted these measures and are seeing cases of the virus rapidly spiral out of control.

Unfortunately, the United States, being a large, decentralized country, is extraordinarily difficult for such measures to be implemented in. Likely it will be up to the citizenry itself to decide if, when, and what, measures will be taken. If other countries are any indication of what is to come, I believe we are a bit behind the power curve and will eventually see - either mandated by the government - or voluntarily by hundreds of millions of consumers - activity that will be highly disruptive to the global economy. That is usually followed by recessions and stock market crashes.

I promise to keep you informed of the situation - in particular, how the economy is faring and when it is time to "get back in" and start growing our money again. It is likely that the "post Coronavirus" economy will be slightly different from the present one that we know and significant opportunities will be available. We will be on the lookout for those, and rebuild the re-entry portfolio accordingly.

Thank you for your trust in us. We take it very seriously and appreciate it more than you know.

Best,

Jon

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Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Paragon Wealth Strategies, LLC [“Paragon”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Paragon.  Please remember that if you are a Paragon client, it remains your responsibility to advise Paragon, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Paragon is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Paragon’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.wealthguards.com. Please Note: Paragon does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Paragon’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Also Note: IF you are a Paragon client, Please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.