“Reflect on the fact that the markets had a made meaningful move up last year and up until recently, and that corrections are par for the course,” the senior portfolio manager said on CNBC’s “Closing Bell.”
“Obviously, this week didn’t feel normal by any means, but on balance markets correct 10% a year since the early 1900s,” added Katz, who Forbes ranks as the No. 1 high-net worth wealth advisor in New York City.
Katz’s appearance came on the heels of a tumultuous week for financial markets as investors reacted to growing concerns over the economic consequences of the coronavirus. As the disease spreads into new countries and total cases rise, so too has worry it could severely curtail global growth.
The Dow Jones Industrial Average fell more than 12% for the week, giving up 3,582 points and entering into correction territory.
The S&P 500 declined 11.5% in its worst weekly performance since the crisis and sits about 13% of its all-time high, which was registered just last week.
The Nasdaq Composite closed flat at 8,567.37 but was at one point down 3.5%. The tech-heavy index posted a weekly loss of 10.5%.
The market’s declines eased up slightly Friday after a statement from the Federal Reserve in which Chairman Jerome Powell said the central bank will “act as appropriate” to support the economy during the coronavirus outbreak.
For many individual investors, Katz said the most appropriate action is little action at all.
“The best trade, at a minimum, is no trade,” Katz said. He said patience is paramount over the next two weeks, a reference to the up-to-14-day incubation period of the coronavirus.
“The only cure we need is time,” Katz said.
For investors who are highly liquid or underweight equities in their portfolio, Katz said “you need to consider legging in, which we did today.”