Coronavirus wipes out $1.7 Trillion!

Coronavirus fears hit stocks

Yesterday I saw a headline claiming that 1.7 trillion dollars in stock market value had been wiped out. Today that number is even higher. Things can start looking pretty scary when all you hear or read are headlines like this.

Remember: The news folks love stuff like this. Whatever news network or medium you prefer, they’re all in the advertising business. They make things as dramatic as possible so you will watch or read. When they get good ratings, they can charge advertisers more. It’s that simple. You won’t keep watching if they tell you the truth, which is that, in terms of your investment portfolio, it will likely be a distant memory in 6 months to a year. I know it doesn’t seem like it today. It never does. 

If we look at history though, that’s what typically happens. The market will recover. The best bet at times like this is to ask yourself: “Do I need all the money in my portfolio next week or next month or even next year?” Another question: Even if you’re currently withdrawing money from your portfolio, how much are you going to withdraw per month or year? A small fraction of the account value. There’s no need to abandon long-term your plan.

When I develop financial plans for my clients, I expect that things like this will happen. They’re already baked in. Remember, the average decline in the S&P 500 during any given year is around 15%. So, my main point is this: Please don’t panic. This too shall pass. You’ll surely mess up (and maybe destroy) your long-term plan if you sell everything. Trust me, you don’t want to do that.

I had to search for it, but here is a sane article explaining how the markets have recovered after other other health crises:

If you need more reassurance, come in to my office and I’ll show you the performance of the stock market since 1926.

As always, if you want to talk, I’m here for you. 678-880-6267