What a week it has been, and it isn’t over yet. As I type this post, the Dow is down another 700 points heading into the last hour of trading and every alert on my phone is about a stock reaching a new low.  I’ve spent the last couple of days talking to clients and my partners about what is going on with the Coronavirus and the markets. Nobody knows when it will stop.  Unfortunately, times like these are part of investing, but it is important to focus on what you can control when these situations arise.  It is worth noting that markets tend to overshoot on the downside and on the upside.  It looks like this time is no different as we don’t have any real facts on what the impact will ultimately be.  For now, the market is using it as an excuse for a much-needed correction. 

I’m including an article from the New York Times at the end of this post so you can hear the normal stay the course and focus on the long-term advice from someone other than us.  It is a great article that highlights the importance of not getting consumed with day to day moves in the market and includes a chart of the market over the last 10 years.  I know it does get redundant, but there is a reason that this advice is given every time the market goes through correctional phases.  The advice has held true every single time; even in 2008 when we all thought the world was ending.

One last point to close with is for you to put your own situation into perspective.  How much cash do you have outside of the market?  How much money do you have in bonds?  Do you have any real estate investments?  When do you actually need the money that you currently have invested in stocks?  If the answer is not in the near term, then you don’t have a whole lot to worry about.  If you have your money diversified into different buckets and your income for the next year or two is safe, then don’t let the headlines scare you into making a big mistake.  Even if this is the next big crisis, it, too, will eventually pass.  If you’re still worried, we’re happy to have a conversation with you. 

Posted by: Jude R. McDonough, CFP® AIF®

Article from New York Times: Click Here

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