In your investing lifetime, you may only see a situation like the recent novel coronavirus (COVID-19) a few times. This is a circumstance where complete candor is necessary. The truth is that we can’t yet gauge the full economic impact, and by the time we can, the volatility may have passed.
Through times like these, I hear from some clients that they can find it difficult to stay committed to an investment program when fears are high. It is important to remember however that, in terms of market declines, the recent drop isn’t unprecedented. Though we do not know if we have reached the bottom of this market decline, or how sharp the upswing will be, take comfort in knowing the United States economy will prevail.
Markets Have the Virus
Right now, markets are reacting to the news because the outcome is unknown. In a way, COVID-19 has “infected” markets all around the world. In times of market uncertainty, some traders believe the best approach is to sell. Fear is driving decisions. Nobody would blame you if this uncertainty gave you a bit of anxiety, as well.
You Don’t Buy Snow Tires in a Blizzard
By working together to develop an investment strategy that fits your risk tolerance, time horizon, and goals, we have been preparing to weather turbulence. When a blizzard hits, the people who already own snow tires are usually happier than those venturing out into the cold, hoping they’re still in stock. In the same way, it’s generally best to make decisions during periods of low market volatility. We’re in the middle of the storm right now.
Here to Support You
This may be the time you need a trusted financial professional most. During most volatility, we advise you to “stay the course,” and that generally proves to be the best course of action. In times like this, however, it’s easy to question conventional wisdom. It is important to remember, unless your financial plan or time horizon for investing has changed, market fluctuations should not alter your investment approach.
I am here to help you and your family during this time. Whatever decisions you make, please allow me to support you through them. Feel free to reach out to me with any questions or concerns.
 wstreet.com, February 27, 2020