Unsurprisingly, the Coronavirus dominates the media and our conversations. It's scary and while I believe the long term economic impact of the virus will be quite modest, our attempts to slow down infection will have a significant near term impact on the global economy and investor sentiment.

While there is a lot of information and miss-information about the virus and its economic impact available at our fingertips, I wanted to flag two items for you. The first is CIBC's perspective on the virus and the second is a recent email from John Mauldin from Mauldin Economics. John's comments are pragmatic and include some interesting anecdotes about China, supply chains and actions that governments can take, like relaxing tariffs, that will help us recover more quickly.

I believe the near term volatility will ultimately create an excellent buying opportunity for investors that have capital, conviction, the fortitude to act and the ability to arbitrage time. However, in the near term investors should focus on investments that benefit from volatility in equity markets, volatility in sentiment, and volatility in fixed income spreads. While these investment vehicles tend to under-perform when equity markets rip higher (like 2019) they tend to provide peace of mind when the world becomes volatile.

Delli (delli@cibc.com)

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