With coronavirus (COVID-19) all around us, investors may be wondering how their investments will fare as this ‘global pandemic’ spreads. Is COVID-19 capable of moving markets? We know it is and came at a time when the economy was already stressing. Earlier market movements starting in February 2020 were the result of unassociated economic factors and the public’s reaction to fear. Now, while the U.S. economy is being impacted, investor’s resilience to react will be tested. The ‘markets’ hate uncertainty. How much and how long COVID-19 will affect economies is to be determined. Let’s take a look at Coronavirus and the markets.
COVID-19 is expected to cost more than any previous epidemic. Companies around the world are preparing for their impacts. After witnessing China’s production come to a standstill. Perhaps this period can teach us all lessons about unpreparedness.
One thing for investors to consider is about Coronavirus and the markets, markets are still trading regardless. Even though exchanges halted trading in early March to stem the decline, a technique used to force a pause and reduce the pressure of panic selling, market volatility will continue for some time. Additional steps to curb the impact, most recently by The Fed lowering rates, will help support a slowing global economy over the next weeks to months.
What investors should keep their eye on during the upcoming weeks, if not months:
During periods like this, we recommend investors consider halting their own reactive trades to stem their portfolio’s decline. When investors give in to emotion at the wrong time and pull assets out of the market, inevitably, they create a loss that is difficult to recover. We have been preparing for this and will make portfolio changes at opportune times, not based on fear. If you have concerns about your portfolio during this heightened period, feel free to contact our office at any time.
Additional Disclosure: These are the opinions of the author and not necessarily those of the Firm, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.
First Fruits Asset Management has been in the financial services profession since 2007. We work together to create a personalized financial plan. We then review and revise the plan as situations and/or goals change over time. Contact us today to learn more about how we can build a partnership with you today.