The global health scare, likely to soon be declared a pandemic, is the trigger that caused the fastest ever correction (10% or greater drop) from a market peak in stock market history. COVID-19 is a health problem, but because it is so new and rapidly evolving, no on knows with any certainty how much damage it will cause to the global economic engines.
The real problem for the markets is this uncertainty.
Markets don’t like uncertainty, and when investors are focused on a rapidly evolving story, like this latest corona virus, it subjects the markets to heightened levels of volatility.
Please don’t confuse a global health problem with a global economic problem. This is not the 14th Century when the Plague killed 25% of the world’s population. We live in the era of information overload, where every nuance is magnified, generating fear and creating uncertainty.
The same instant news and social media coverage that is causing fear is also creating the mechanism to slow this threat, by raising awareness. It’s also birthed opportunities for huckster self-promotion and second-guessing.
For reliable information about the health risks, please visit trustworthy websites such as the World Health Organization (www.WHO.int) or the Centers for Disease Control (www.CDC.gov). If you prefer non-governmental sources, try www.WebMD.com, or www.MayoClinic.org.
For reliable advice about your investments, look to Enduring Wealth Advisors®. We are monitoring this situation and adjusting positions when appropriate, as we navigate yet another stretch of volatility.
Follow us on social media including Facebook, LinkedIn and Twitter, our website www.EnduringWealth.com, send us an email, or you can now text with Ralph at 951-425-4857. Phone calls are always welcome, too!