You have probably seen some alarming reports about the coronavirus sickening thousands and spreading from China. Many clients have expressed concern about their portfolios. We feel terribly for those impacted by the virus and are closely monitoring the situation; however it is unlikely that the coronavirus will impact your financial well-being.
We do we think this? Think about your life and how you spend money. The vast majority of your spending won’t change at all because of the coronavirus. You will probably continue to search for things with Google, purchase products from Amazon, and use Microsoft Windows. Even if there are supply chain interruptions, you will just wait a little while to buy a new iPhone.
When was the last time you worried about SARS, Ebola, or Zika? Those diseases made headlines in 2003, 2014, and 2016, respectively. Have they impacted your lifestyle or investments? American business powered through these outbreaks by generating innovative products and improving efficiency. The S&P 500 is up 420%, 98%, and 72% since the beginning of 2003, 2014, and 2016 respectively.
The only thing that spreads faster than the coronavirus is fear. Fear is always present, it is just latent and under the surface. The reality is that there will always be cause for concern, and enterprising entrepreneurs will find a way to deliver products to customers. Fear can cause us to focus on the immediate, even at the expense of the long term. If you are truly worried about the coronavirus’ impact on your portfolio, you may have too much risk with or without the coronavirus.
Some will be tempted sell today with the plan to repurchase once concern passes. But if you did not know to sell before the outbreak, how will you know when to buy before stocks rebound?
And please remember, the news media makes money by capturing your attention, not through your wise investment decisions. We can help you maintain perspective and stick with the sensible asset allocation we developed with you. Please call us at 722-320-9658 with any questions or concerns.