We’re currently seeing a market dip based on concerns about the Coronavirus and its impact on the global economy. Prepare for some turbulence as these events ripple through the market.
What is happening with the markets ?
The spread of Coronavirus is having an impact on global transportation and trade. Its resulting in an economic slowdown and interruption to the supply of consumer goods. This is reflected in declining stock markets. This is nothing new, as we have seen dips like this in the past with disease outbreaks such as SARS and more recently H1N1 or SwineFlu.
When will they recover ?
Its impossible to know when markets will recover but historically speaking, they always do. During previous outbreaks markets experienced short term dips amid global panic. Staying invested means you can capitalize on opportunities to recoup losses when markets rebound.
Should I change my portfolio ?
Have your goals and financial profile changed? If not, then I wouldn’t recommend making a switch. Your portfolio was selected to help you meet your goals taking into account that there would be periods of volatility. However, if your goals have changed or you are losing sleep oer market volatility, speak to your financial advisor. If your stated risk profile doesn’t meet your actual risk tolerance, you should discuss this at length. It is important to understand your comfort level with market volatility and to have your investments reflect this accurately.
Should I pause my deposits until markets recover ?
In a word, NO. Don’t pause your monthly savings deposits. In fact, a savvy investor like Warren Buffet would say now is the perfect time to buy while prices are in decline. So, if you’ve got an appetite for increasing your savings, don’t be deterred by a down market.
“Widespread fear is your friend as an investor because it serves up bargain prices”