Coronavirus and the stock market fall

Whether you’re sick of hearing coronavirus (or COVID-19) on the news or trembling with fear and washing your hands 40 times a day, the threat of a global pandemic is very real. 

What that will mean for us in reality we will only know with hindsight. And as I have absolutely no medical training whatsoever, I am not going to speculate.

What you also might have noticed is the current drop in global stock markets, and this might also be making you slightly nervous.

If you’re a client of ours then you should know better than to worry, as we would have told you many times before that the stock market gets nervous when bad news happens. 

Negative news

We will have also told you many times not to watch the news, as it only ever paints a negative picture. The ‘and finally’ segment of positive news at the end of News at 10 disappeared when Trevor McDonald retired.

Why shouldn’t they worry? Because they invest with a plan and they don’t need to access their money for ‘X’ years into the future, that’s why.

And they are also invested in a globally diversified portfolio matched to their personal risk, not the FTSE 100.

And also because the stock market goes up and the stock market goes down. Since 2008 we have pretty much seen investment growth beyond anything you will have seen in your lifetime. 

What we are seeing now is a panic created by an external factor and nobody can predict how it will turn out. In this century alone, however, we have already seen:

  • September 11 attacks in 2001; the London terrorist attacks in 2005
  • The global financial crisis of 2008
  • The European sovereign debt crisis in 2011 (remember Greece being bailed out?)
  • A Chinese stock market crash in 2015 and, dare I say it, Brexit. All external factors that affected the stock markets

I read an article recently which stated:

“Returns are never free. They demand you pay a price, like any other product. And since market returns can be not just great but sensational over time, the fee is high. Declines, crashes, panics, manias, recessions, depressions.”

As far as markets are concerned this will be another dot on an investment chart eventually. My advice is to only worry about things you can change and forget about the things you can’t. In the meantime, ignore the news, wash your hands and follow the advice of the experts!

Jamie Bogle, Financial Planning Director, Co-Navigate

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