Ep. 11: THE VIRUS & THE MARKET

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Welcome back to Money Matters where I help guide you in becoming a better and more confident investor.

In this episode of Money Matters I wanted to address the hysteria that is the Corona-Virus or any black swan type of event that affect investor’s portfolios or investor’s outlooks. So I figure since we’ve been having conversation surrounding the virus with those who choose to partner with us in the Rochester area this week, and most likely next week That I would echo some of those thoughts and sentiments in this video for anyone in the Rochester area that’s looking for a little help and direction on the matter when it comes to their investments.

First I know this whole situation is extremely uncomfortable as investors watch their portfolios continue to go down. Or simply the volatility is enough to make you sick to your stomach with worry. While I know that most people understand that markets go up and down, at the end of the day they just want to know that their advisor is there, or at least be a sounding board to help take that fear from them letting them know that we are here to help during these times of need.

Don’t fall victim to the hysteria and make irrational financial moves! Each crisis we have seems like the end of the world. Especially with having all this information spreading faster than the virus itself. You may think that it’s different this time, and maybe it is. But it’s most likely not. Whatever come of this scenario the world will continue on. Humans will continue to consume things. Continue to add to the global GDP. And we WILL reach new highs in the future.

When making financial decisions, always refer back to your plan! Your timeframe and the financial goals that you set with your financial planner. If you’re 10 plus years out from retirement you’ll have time to rebound from this. While the coronavirus is hurting the stock market in the short-term it will not likely change much about your finances over the long-run.

Spanish Flu, World War II, Korean War, Vietnam, Cuban Missile Crisis, Hong Kong Flu, Iran Hostage Crisis, AIDS Epidemic, Ebola, Swine Flu, Bird Flu, SARS, 9/11, Coronavirus. Each caused the market to dip or pause, but life went on, and the stock market continued its historical upward trend. I’m sure this list could be a lot longer, but you get the point.

The best advice I can tell you is stick to your Plan! And if you have a longer time horizon and have cash on the side that you want to put to work then take advantage of the low point in the stock market! Plus all these loses that you’re enduring are only on paper! You still own the same number of shares as you did before this virus started and fear set in. It’s only when you sell does your loss become permanent.

And if this is something that is making you uneasy then stop looking at the markets. Studies have shown that the more you look at your investments, the more likely you are to go in and make irrational money moves that are detrimental to your overall financial security. If you’re talking with you adviser and they are telling you that you should be selling everything and moving into a different strategy then it’s time to look for someone else to be working not only with you, but who’s in your corner with your best interest in mind.

When you look around the world, as of making this video do you believe on average the best companies in the world are worth close to 20% less than they were a month ago? The dip in the market is going to be initially driven by panic, then there’s going to be a slight hangover from the lack of spending, but in time the portfolios will get back to neutral and some.

And lastly, we’re coming out of an amazing bull-market – and when you look at your portfolio you won’t have this money you’re currently down if it wasn’t for the growth from being in the market you wouldn’t have the balance that you have today to begin with! Plus tax season is right around the corner so hopefully you can get a return to help give take the edge of more so.

From an economic stand point this isn’t making a whole lot of sense and my team and I feel that this fear and news is masking global growth

Debt to income lowest levels have been the lowest in two decades

New housing starts are increasing first time building homes again since the great recession which has always been a major driver of economic activity and growth because the ripple effect

What does concern me is we need to get rates up – because if we need to actually lower rates to increase the flow of money in times of slower period then the Fed won’t have that monetary card to play. So we’ll see what the future hold and in the meantime, hold on and don’t do anything rash to permanently offset your financial plan. If you want to discuss your portfolio in more detail, I’d be happy to do so to make sure you’re where you need to be! Thank you for watching and as always for giving your finances the attention that they deserve.