The stock market caught the coronavirus today and fell
hard. Over the past several weeks, investors have been unsure of the impact of
the virus and balanced it against good corporate earnings and other news and market
movements have been restrained but today the markets fell based on headlines of
worsening contagion.
If you wish you traded
out of some stocks before today’s coronavirus news, remember that the markets
always adjust to news stories before you can trade on them.
Therefore, if you do trade, you are already
too late based on what we know right now.
Any decision to make a bet on a stock or an entire market is a claim
that you know better than the rest of the world because markets trade at an
equilibrium price where the optimism of buyers is offset by the pessimism of
sellers.
Every year, many brand name investment
firms claim to know better than the collective of the world’s investors and
guess wrong.
Nobody likes to see their
investment account balance fall but investors like Warren Buffet see it as
buying opportunity and if you are invested for a distant goal, then short-term
drops in the market should not concern you.
You should keep the faith that while global corporate earnings may be
impacted by something like coronavirus, in the long run, all those profits will
lead to higher stock prices over the decades before you reach your goal.
(Past performance may not be an indicator of
what to expect in the future and your individual circumstances should be
considered in any investment choice.)
Larry Pike, CFA
Client Priority Financial Advisors LLC
www.clientpriority.com
Blog: clientpriority.blogspot.com
