Although this isn’t a workout session with a personal trainer barking instructions at all of us, the adage “Short-Term Pain leads to Long-Term Gain” must remain our focus. Our fortitude, our psyches, and our emotions are certainly going through a workout like we haven’t experienced in a long time. But it’s all for Long-Term Gain…don’t lose focus. The past few weeks have been very unnerving for investors, as COVID-19 continues to rapidly spread around the globe. Here in America, the virus’s effects are beginning to feel “real.”
Within the past 48 hours, we’ve seen a number of monumental impacts by Coronavirus. Travel into the US has been restricted, the NBA and NHL have postponed their seasons, indefinitely, Major League Baseball has delayed opening day, and March Madness has been cancelled. Schools are closing, and families are cancelling vacations and delaying purchases. These activities will have short-term economic consequences, for sure, but the real question surrounds how long it will take for the economy (and the markets) to recover.
COVID-19 fears also continue to create extraordinary moves in the financial markets:
Right now investors are scared to death, and the markets hate uncertainty. There could be several more weeks of panic selling, coupled with some rebounds along the way. The markets will eventually stabilize and find a bottom. This is not a question of if, but when.
In times like this, many find it difficult to stay committed to their investment plans, but a quick look at recent history should help you keep this week’s events in perspective…Long-Term Gain.
Remember February 2018, when the trade dispute with China rattled the markets? In just six trading days, stock prices went into a 10-percent market correction. That was short lived!
Or how about the 4th quarter of 2018? In October of that year, the Dow saw an 800-point drop, largely due to rising interest rates and global economic concerns.
Then in December, the Dow lost 600 points on Christmas Eve, only to rise 1,000 points the day after Christmas. From peak to bottom, the Dow lost nearly 20%, but eventually it rebounded!
After the terrorist attacks on 9/11, there was a period of fear and uncertainty that drove the markets lower. As Americans, we grouped together, and the markets recovered. Those “workouts” for the markets and our perseverance as investors certainly left us sore the next day, but the growth, thereafter, was well worth the short-term pain. The COVID-19 virus is a valid concern, but the markets have survived wars, presidential assassinations, terrorist attacks, pandemics and much more. The markets will bounce back.
The good news is that we have a plan. We continue to hold a portfolio of quality stocks, bonds, and alternative investments. We believe that diversification and asset allocation will help you reach your long-term goals. It’s important to remain disciplined and not let short-term fluctuations in the market result in rash decisions that may jeopardize your financial future.
So, if you find yourself getting anxious and feeling like you can’t finish this workout, know that we are here to help you and your family answer any questions that might arise. Don’t let fear get its grip on you. Now is the time to have have faith, because this too shall pass!
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