Good thing it’s a leap year or I wouldn’t have met my arbitrary self-imposed monthly deadline for adding some thoughts to my website. Phew, better late than never as they say. This has obviously been a volatile week in the markets but first and foremost, don’t forget the loss of life being experienced by families across the globe. The numbers might be relatively small, especially compared to seasonal flu this year (roughly 3,000 from Coronavirus vs. 80,000 seasonal), but it’s still important to be sensible and take some basic precautions. Your mother was right; wash your hands and cover your d@#% mouth when you cough!
Now for the standard reaction to a pullback… stay the course, you are invested for the long term, market volatility is a normal part of the cycle, blah, blah, blah. All of that is 100% correct by the way but it is human nature to react and feel fear at times like this. Fear is normal. Acknowledge it. Then let it go. The move was historic as the S&P moved from an all time high to a 10% correction in 6 days! That’s eyebrow raising, but it is no reason to panic if you are allocated properly based on your time horizon and risk tolerance. Remember, market volatility and risk are not the same thing.
After experiencing the recent bull market and new highs it is natural for focus to shift to getting the big returns of or beating the “market”, but it’s not what’s good for you. You should focus on your goals, your personal situation and your plan. A good financial planner will help you understand your true risk appetite and work within it, especially in the time of market overreaction, whether that be up or down.