And it continues, and here we are in week whatever of the novel coronavirus 19 wondering how long this will go on and sitting here worrying maybe just a little bit about a few things. The only real answer to give on the duration of this is just too long, whatever that amount of time ends up being. Watching the virus spread can be nerve-racking but we all need to remember that at no other time in the history of the world would we better suited to deal with this. Advances in medical knowledge, in medical science, in technology in general and computing power in particular give us an edge that will move us forward through this.
The current situation and the effects on the market are certainly unprecedented but the long-term market effects, while not completely predicable, can be inferred. What also really needs to be pointed out is that the market has time and time again proved to be remarkably resilient. To really appreciate this resilience please take a moment to examine the chart below from First Trust which maps out various world crises and where the market was.
S&P 500 Index 2008 – March 31, 2020
What we see when looking at the chart is the importance of a plan and the importance of longevity. To be truly effective in investing the focus needs to be on the long-term with a mind for how the periods of short-term volatility provide opportunities to buy strong stocks and funds that are down but show evidence of being able to weather the current storm.
Let’s also put some perspective on the decline in the market. The declines make for nervous folk and everyone wants to avoid them but in reality market corrections are inevitable, it’s simply unavoidable. It is to be expected and while it’s certainly been bumpy in March you can see from the chart below that these declines happen with some usual frequency. We can’t predict corrections, but we always prepare for and expect them.
Moving on to other potentially financial news the FTC has released some guidance on potential scams going on right now with regards to the novel Coronavirus. None of them are particularly novel themselves, but hey better to be vigilant and not be caught up in any of them so that they don’t become personal financial news.
From the FTC:
Avoid Coronavirus Scams
Here are some tips to help you keep the scammers at bay:
Hang up on robocalls. Don’t press any numbers. Scammers are using illegal robocalls to pitch everything from scam Coronavirus treatments to work-at-home schemes. The recording might say that pressing a number will let you speak to a live operator or remove you from their call list, but it might lead to more robocalls, instead.
Ignore online offers for vaccinations and home test kits. Scammers are trying to get you to buy products that aren’t proven to treat or prevent the Coronavirus disease 2019 (COVID-19) — online or in stores. At this time, there also are no FDA-authorized home test kits for the Coronavirus. Visit the FDA to learn more.
Fact-check information. Scammers, and sometimes well-meaning people, share information that hasn’t been verified. Before you pass on any messages, contact trusted sources. Visit What the U.S. Government is Doing for links to federal, state and local government agencies.
Know who you’re buying from. Online sellers may claim to have in-demand products, like cleaning, household, and health and medical supplies when, in fact, they don’t.
Don’t respond to texts and emails about checks from the government. The details are still being worked out. Anyone who tells you they can get you the money now is a scammer.
Don’t click on links from sources you don’t know. They could download viruses onto your computer or device.
Watch for emails claiming to be from the Centers for Disease Control and Prevention (CDC) or experts saying they have information about the virus. For the most up-to-date information about the Coronavirus, visit the Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO).
Do your homework when it comes to donations, whether through charities or crowdfunding sites. Don’t let anyone rush you into making a donation. If someone wants donations in cash, by gift card, or by wiring money, don’t do it.
Please be safe out there folks, and do not hesitate to reach out to us if you need anything at all.