TRI-CITIES, Tenn. (WJHL) – Financial advisers said the coronavirus has created volatility in the market and is affecting essentially every type of investment.
The overall message: just hang-on.
“Just having that long-term mindset will do a lot for you versus short term emotions making long term decisions,” said Edward Jones Finacial Adviser Brackton Smith.
Smith said it has produced fear in many investors. Trading was stopped briefly Monday morning after stocks fell sharply due to coronavirus fears and plunging oil prices.
The Dow dropped 7.8 percent, the worst fall since 2008.
Smith said the best thing you can do during market uncertainty is keep in mind when the money is needed and consider the actual needs for it.
“It’s taking that time horizon like we discussed of going, hey I have a 30 year time frame before I’m going to touch this and I can’t let the short term volatility deter my plans,” he said. “Small incremental moves can make a big difference over time and the real advantage you have is time.”
Associate Professor of Economics with Milligan College Dr. David Campbell said there have been a few projections of when the markets could return to normal.
“Some projections are that the crisis will work itself through by the end of the second quarter, and we’ll get back on track,” said Campbell. “There’s other projections that may lead to a severe recession, but right now that’s not the most likely outcome.”
Campbell said while the coronavirus will have a global economic effect, the U.S. is better positioned than other countries in the world.
“With the trade tensions we’ve had with China recently, a lot of companies have been gradually moving their supply chains out of China,” he said, “the U.S. is actually in a better position to weather this storm than if we hadn’t had those trade tensions over the last couple of years so.”
Smith said the best idea is to consult your tax professional or financial adviser before making any changes to accounts.