By: Felipe Rivas
2 min read December 2020— COVID-19 has stressed the importance of innovation and sustainability when it comes to investing. With all that transpired this year, from health-related disparities to social unrest, COVID-19 has increased the awareness of Environmental, Social and Governance investing. Edward Doughty, managing partner at Epic Capital Wealth Management, shares his insights into how those two factors will increasingly become top of mind in investment decisions.
What opportunities has the pandemic created for your clients?
First and foremost, we are very sensitive to the devastating loss of life that has taken place throughout the spread of COVID-19, and our hearts go out to everyone who has been personally affected.
We have always been a big proponent of the old “buy low, sell high” adage. When you sell high, especially when the market looks extended like it did earlier this year, it allows you to accumulate dry powder and tuck it away for a more volatile time. We had not seen any significant level of downside in the market since the magnitude and degree observed in 2008. We were due for a pullback at some point. As we went through year-end reviews, from Jan. 15 through the end of February, we were anticipating a pullback as the market kept breaking new highs; of course, we had no idea it would be something like a pandemic that caused it. Then we put a big chunk of those dollars back to work during the worst of the downturn in mid-late March through April. It’s not that we were trying to pick the absolute low. The most important question to ask yourself, if you are considering adding money during a major downturn is: if the market does continue to drop, how long could it take to get back to where it is the day you make the investment? If there is panic selling, like we saw, there is usually an incredible bounce from the ultimate bottom and it happens very quickly, usually intra-day with a continued move higher over the ensuing days. The risk was well in our favor to put money in and our clients were well-rewarded for acting when they did.
How would you rate the Fed’s liquidity approach?
It was the right move because of the dynamic of the unknown in terms of how far-reaching this pandemic would be. There are obviously long-term ramifications when you artificially stimulate an economy by giving money away. You don’t want to see the worst of the worst potentially happen, so you step in to do what is needed with the sense of urgency required and deal with the ripple effects further down the line.
What is your assessment of the low interest rate environment?
It stimulates the economy in terms of borrowing, lending and leverage. It provides people the ability to obtain homes. The idea that There Is No Alternative (TINA) propels equities as the better alternative to savings. It is a stimulation tool the Fed has used wisely, and we anticipate rates to remain low for an extended period of time, up until the point we get to elevated levels of inflation, above 2%. It’s a good way to get things moving along and we needed it during these extreme times.
How do you see the impact investing concept evolving from this point?
Investing in a way that has a sustainable impact and employs an Environmental, Social and Governance (ESG) approach is certainly not a secret anymore. COVID-19 has increased the awareness of ESG investing. There has been a massive inflow into that arena. With the presidential transition, there will be more of a push for clean energy. A significant number of the alternative energy stocks — fuel-cell battery storage, wind, solar, electric vehicles — have been the hot topic of the market throughout 2020, with an awareness of the environmental footprint businesses have on both a national and global scale. It keeps gaining traction. One in every three dollars is now dedicated toward sustainable investing and ESG. It is emblazoned on the front of most big asset management websites. Entire corporate departments are now focused on it. It’s a big component of what we do at Epic Capital and we see it as an additional layer of due diligence when we evaluate investment opportunities for our clients.
How do you see Charlotte emerging from the pandemic?
We hope Charlotte’s economic activity further diversifies. The more it does, the more stable its business becomes, while also gaining more representativeness of the greater United States from both a social and economic standpoint. Moving somewhat away from banking and into manufacturing, along with technology, will enable Charlotte to gain traction in fostering the city’s tech hubs that are promoting innovation. COVID-19 has solidified and legitimized the need for both technological advancement and the ability for anybody to do it from anywhere. You do not need to be in Silicon Valley to set up a company on the NASDAQ. Because of its beautiful topography, weather, and everything else, we hope people will start turning toward Charlotte. From a cost of living standpoint, it’s still highly more attractive than several other areas where you pay much more for a lot less.
What are Epic Capital Wealth Management’s top goals and priorities for 2021?
It will boil down to an intense focus on client accounts, putting 2020 behind us and preparing for what lays ahead with more clarity. By 1Q21, we will have utter clarity over the new head of the executive branch and the dynamic in terms of the legislative branches of the United States. The other known, which has been a frustrating political issue, will be the magnitude of stimulus the government puts forth to aid in the economic recovery. We also anticipate having an early vaccine dissemination by then, as well as improved treatment plans. That will open up the doors to innovative expansion for Epic Capital Wealth Management because we believe that a specific headquarter location is not that important anymore. Adapting to change and advancing in new directions is key to any business’ long-term success. We enjoy the pivot, it keeps us fresh.
For more information, visit: https://epiccapital.com/