Considering the volatility in the markets related to Coronavirus, we’d like to provide some of our thoughts:
1. As always, we believe that determining an asset allocation policy (stock and bond percentage allocation) is the most important starting block of investing. If we set this up properly through financial planning, based on your specific situation and capital needs, we are confident that we can stay the course through good markets and bad ones.
2. Coronavirus is concerning and many companies are discerning through the short-term and long-term impacts of the slow down in Chinese production. With most geopolitical driven events, the market tends to react significantly to the “unknown” (which is where we believe we are, currently). As these situations start to unfold and information becomes clearer as to a resolution, the markets settle down and begin to focus back on the economy and fundamentals.
3. We talk a lot about market corrections (10% drop from the 52-week high in the stock market). The mentality of taking one step back to consolidate and give investors a good reason to get new capital into the market, in order to take two steps forward. We believe we are in the midst of a correction and are optimistic that this volatility will go away quickly when there is some confidence that coronavirus can be resolved.
As always, please feel free to reach out to your advisor with any questions or concerns. It is our highest priority to help you feel comfortable with your investment strategy and financial plan.