COVID-19 and Jack Bogle

We would like to take the time to thank you for your continued belief in our dedicated staff,
innovative technologies, and Private Capital Group philosophy during this uncertain time. We
believe that keeping our clients up to date on important information is a vital part of how we are
going to get through this pandemic without panic and over-reacting.

We all have many questions regarding the COVID-19 virus: How did this virus start, where did
it come from, how deadly and contagious is the virus, when will we cure COVID-19, and will
the markets ever recover? Although there are still many unknowns, we are beginning to learn
answers to these questions every day. In all likelihood, there will be more infections, closures,
lockdowns, cancellations, negatively-impacted businesses, and a strong likelihood of a recession
in the coming months. That being said, we would like to state some positives in the news
recently. Some of this news includes massive government monetary and fiscal stimulus, virus
containment in China, and the fact that we may be on our way to developing treatments or
finding a cure. New cases in China and South Korea are falling and cases in Singapore appear to
be more stable.

There is no question that the markets have become extremely volatile during the COVID-19
outbreak. Equities have dropped significantly from their all-time highs less than a month ago.
Although the short-term outlook appears as if there is no end in sight, we must remember a few
things. When recoveries do happen, history shows that they could easily be more “V” shaped (or
at least “U” shaped). Some factors that can support such recoveries are monetary stimulus (e.g.
interest rate cuts, quantitative easing), fiscal stimulus, the consumer benefitting from lower
interest rates and low oil prices, and businesses looking to gain ground in respect to overtime
payments for employees.

Shifting focus to the bond market, with U.S. Treasury yields grinding lower, municipal-to
Treasury yield ratios have suddenly risen to historic levels. Although some liquidity is still
available, the yield is significantly higher. The high-yield municipal bond market is currently
seeing extreme volatility. Before the recent COVID-19 crisis, municipal credit health was the
strongest it had been in over a decade. Short-term, municipal markets are in the midst of a
technical mismatch. Unfortunately, much of the bond market is also under pressure, just not
nearly to the extent of the stock market decline.

Stock market dips (even as severe as this one) are a part of investing. Hope will most certainly
return and those who stay the course and trust in the long-term investing approach should reap
the rewards. Private Capital Group will continue to keep our staff, families, and our community
safe during this pandemic. We will continue to provide our clients with excellent service and
dedication, up-to-date information, and guidance.

We have included a hypothetical conversation article with legendary Vanguard Founder Jack
Bogle, titled, “What Would Jack Bogle Do?”. We believe this article may shed some light on the
global current financial situation. Please read this article.

Please do not hesitate to reach out to anyone at Private Capital Group, as we will be more than
happy to guide you through this volatile time.

Feel free to reply to this email and we will schedule a time to talk.

Be safe and healthy! 

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recommended or undertaken by Private Capital Group, LLC (“PCG”), or any non-investment related content, made reference to directly or indirectly in this
communication will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove
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discussion or information contained in this communication serves as the receipt of, or as a substitute for, personalized investment advice from PCG. To the extent
discussed herein, investment indices are unmanaged and cannot be purchased directly. Historical performance results for investment indexes and/or categories are
included for informational purposes only and generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment management
fee, the incurrence of which would have the effect of decreasing historical performance results. The S&P 500 is an unmanaged index of 500 widely held
stocks that is generally considered representative of the US stock market. To the extent that a reader has any questions regarding the applicability of any specific issue
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Disclosure from our Author:
Investment advisory services offered through PCG, a registered investment advisor. This e-mail may include forward-looking statements that are subject to certain risks
and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. The above communication is written by Michael
A. Higley. Any comments, opinions or facts listed are those of Mr. Higley.
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