As the number of people infected with the novel coronavirus continues to grow, so might our anxiety about the spread and potential impact of the virus. While we do not know how many people the virus will infect and the lifecycle of this virus, we do know that you may have some questions about how this might impact your investments and what to do about it.
#1. Do not give in to the urge to take drastic action. The news stories about the virus can indeed be scary, but it's important to remember that market prices react immediately to both good and bad information. To potentially make money or avoid potential losses, we would need to trade before it is news. And of course, we don't know the future, so any action would be a guess, and any positive result would be luck.
#2. Maintain perspective. This isn't the first new virus we've seen, and it probably won't be the last. SARS, Zika, H1N1, and others have all come and gone. While the concerns at the time were the same (How quickly will it spread? Will there be a cure? Will it slow down the global economy? Will it impact my investments?), our society has figured out how to overcome past viruses, and markets have done the same. In fact, markets have short memories when it comes to epidemics.
#3. Be on alert. The Securities and Exchange Commission issued a public warning that fraudsters are attempting to play into our natural emotions of fear and greed during this period of uncertainty. There have been reports of social media posts and online ads promising a huge profit by investing in companies that have supposedly found a cure for the coronavirus. Also, beware of investment scams that promise "guaranteed" returns or "income protection." Generally, if it sounds too good to be true, it probably is.
Stick to your long-term plan and tune out the noise. We invest client money in a way that is not dependent on lucky guesses or get-rich-quick schemes. We use investment strategies and design financial plans that assume events like these will come and go. Stay positive and focus on your family and your health.
If you have any questions about your investments, need to inform us of family or work-related changes, or want to discuss your financial plan, don't hesitate to reach out! We are here for you during this challenging time.