Fear can be as virulent as the Coronavirus. While the exact effect of the Coronavirus on the US economy is unknown and unknowable at this point, it is clear that it poses risks. That said, don’t let fear or anxiety rule your actions. Three key actions can help you and your family ride through the uncertainties of an unknown medical and financial situation. Remember, stay healthy, stay calm, and stay connected. John Clawson of Winchester, VA is a trusted financial advisor who supports his clients with valuable experience to help make decisions that suit their goals throughout life’s challenges.
1) Stay Healthy
According to the World Health Organization (WHO) coronaviruses (CoV) are a large family of viruses that cause illness ranging from the common cold to more severe diseases such as the Middle East Respiratory Syndrome (MERS-CoV), and Severe Respiratory Syndrome (SARS-CoV), and now COVID-19. (World Health Organization - Coronavirus)
The Centers for Disease Control & Prevention (CDC) advises that symptoms can occur 2-14 days after exposure and include:
- shortness of breath
Emergency warning signs include:
- difficulty breathing/shortness of breath
- persistent pain/pressure in chest
- new confusion/inability to arouse
- bluish lips or face
Note that this list is not all inclusive. Always consult your medical provider for any other symptoms that are severe or concerning.
Recommendations to prevent the spread of infection include regular hand washing, covering your mouth when coughing or sneezing, thoroughly cooking your meat and eggs, and avoid contact with anyone showing symptoms. (CDC - Coronavirus Symptoms)
2) Stay Calm
Merriam-Webster’s dictionary defines the word “pandemic” as: an outbreak of disease that occurs over a wide geographic area and affects an exceptionally high proportion of the population. The word “pandemic” can cause fear as it gives the impression that we are dealing with a virus that is uncontrollable. Fear can cause impulsive decision making and rash actions that could have otherwise been avoided. In these uncertain times it is important to stick to authoritative financial, governmental, and medical sources for your information. Try to avoid a steady diet of fear propagated by the media.
For example, this has not been the first ‘pandemic’ that the U.S. has weathered. You may remember SARS in 2003, or the outbreak of the Swine flu (H1N1) of 2009-2010, Ebola in 2014, and even the AIDS pandemic that started in 1981. The stock market is cyclical with ups and downs whether there is a health crisis or a recession. A solid investment plan that accounts for these ups and downs has a better chance of weathering volatility over the long term. As the stock market rebounds, like it did after these other pandemics and recession, so can your portfolio.
3) Stay Connected
Even though a situation like this might be far and few between, again; there have still been other market declines from pandemics like SARS or from a recession like the 2008 stock market crash. It is important to remember in terms of financial declines the recent drop is not unprecedented.
According to a source at MarketWatch, “The S&P 500 (a stock market index that tracks the stocks of 500 large cap U.S. companies) posted a gain of more than 20% in the 3 months after the World Health Organization said it was investigating the SARS outbreak of March 2003.” (Markets ‘powered through’ SARS, but the coronavirus outbreak is different, Cowen says — and here’s why)
The 2008 stock market crash showed the Dow Jones industrial average fall 777.68%. This was the largest single day loss in Dow Jones history. In 2009 Congress passed the American Recovery and Reinvestment Act to help jumpstart the economy and generate jobs. This was able to boost economic growth and investor confidence. (The Market Crash of 2008 Explained)
To sum, don’t let fear or anxiety rule your thoughts or actions. Stick to your investment plan and stay the course, even when worried about your portfolio. To help with any anxiety over your investments, speak with a capable financial advisor who can assess the risk and the reward for any monetary plans or questions you may have.
Overreacting to the virus and its possible economic effects can cause negative reactions in the economy. Less spending causes less demand which can result in no supply. In the end, the decisions you make now effect not only you, but the economy around you.
A financial advisor can help develop an investment strategy that fits your risk tolerance, time horizon, and goals. It’s never too late to make a complimentary, no obligation appointment with a financial consultant, like John Clawson, to engineer a financial plan that can weather this storm as well as any potential future changes.
*Shenandoah Valley Financial Services is located in the city of Winchester in Frederick County, VA. We serve as financial advisors to clients in the Mid-Atlantic Region primarily in the states of VA, MD, DC, FL, NC, SC, PA, and WV.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. The information is based on data gathered from what we believe are reliable sources. It is not guaranteed. as to the accuracy and is not intended to be used as the basis for any investment decisions. The information presented does not constitute a solicitation for the purchase or sale of any security and is not a recommendation of any kind. Please consult your financial advisor before making financial decisions. Past performance is not a guarantee of future results. The S&P 500 index is unmanaged and you cannot directly invest into an index. Investing involves risk, including the potential loss of principal. (03/20)