Coronavirus, the Markets, and Your PortfolioPrecision Wealth Management
At Precision Wealth Management, we see what’s happening in the markets. To us it is an emotional reaction to world events. Every single market selloff in history has given way to new market highs later. This will be no different. If you have cash on the side-lines it makes far more sense to buy at these sale prices. Stay cool and protect your health instead of worrying about short term financial gyrations.
The World Health Organization has warned of a possible coronavirus (COVID-19) pandemic and the equity markets have had a knee jerk reaction, falling for the sixth straight day on February 27, 2020. This news has a lot of investors fearing slower economic growth, leading them to sell their investments and moving to cash or treasuries. There are major companies sharing that their quarterly results are being hindered by the lack of recent production from China after the significant quarantine the country placed on its residents and businesses; this doesn’t come as a surprise.
The selloff has wiped out positive returns we’ve experienced over the past 3 months. At Precision Wealth Management, we stay poised as we experience this selloff and we look at this as a great buying opportunity. We admit we are not market timers and will not try to enter and exit the market during these fluctuations but if you have cash on the side-lines, then market corrections like these make it very attractive to enter at a lower price than what you could have entered at just a week ago.
In past epidemics, the market sold off sharply but then regained its previous high after the outbreak peaked (Chart Below).
We remind clients to stay focused on the retirement and investment plans they have created with their Wealth Advisor. If your goals are longer term, you should be invested as such; therefore, we remind you that these fluctuations could be a great buying opportunity.
The statistics about how many are affected and which countries are affected come at us so quickly through the media that we’ve taken it upon ourselves to share with you the information directly from the World Health Organization.
As always, if you’re concerned or have more questions about the recent downturn in the market, please reach out to your advisor to discuss further. We are here for you.