NOTE: Given the topic, this post is slightly longer than 20 seconds 🙂
In light of the recent COVID-19 epidemic and it’s effect on some investment markets, we wanted to try and put it in perspective.
First, let’s remember the doctors, patients, and families who are directly dealing with the virus. We encourage you to help if you feel compelled (many organizations are taking donations so they can send masks, blankets, etc).
A few things to remember:
- The media is not your friend. They want you to read their article and don’t care if they provide sound investment advice.
- The media is primarily reporting on a small segment of the USA stock market. Our clients own a broad mix of stocks in the USA and internationally
- Most of our clients own bonds and many bond investments are UP this year
History reveals that panic in markets related to epidemics tends to subside relatively quickly. Further, in most cases, the markets rebound in a similar manner.
The chart below illustrates how the S&P 500 responded during the course of past virus outbreaks. When you fast forward 6 months, these losses had either reversed or were significantly reduced.
While we aren’t sure what will happen in the short term, we recommend that you keep a long term perspective and stay calm.