STAYING HEALTHY & AVOIDING ANXIETY DRIVEN DECISIONS
Perspective and Anxiety
We think too much of the headline news is focusing on the virus’s impact on the stock markets. The important priority is the health of you and your family. We all should be monitoring the spread and ebb/flow of the virus. Medical experts say that we should be very conscientious about washing our hands, using hand sanitizer and cleansing wipes.
Our wish is that you and your family will stay informed, take precautions to stay healthy and that the virus will not become the pandemic market traders are fearing. Please understand that we (and everyone else) do not have clear insight into what direction the markets will run today or next week or the following week.
The quick market sell-off is an anxiety attack. Most think this anxiety-driven selling is the result of the uncertainty around this spreading virus. We have also heard from clients that uncertainty surrounding the US election cycle is also raising their heart rate. We understand there are many reasons to be concerned about our economy and the impact on stocks or stock funds you may own. The companies that make up the major indices are almost certainly not 10% or 20% less valuable businesses today than they were last Monday. We believe real valuations should eventually drive markets to more rational levels. This is good news.
The bad news is that neither we nor anyone else can accurately forecast how long the panic attack is going to last. And we don’t yet know whether one of the triggering events—the Coronavirus, more precisely COVID-19—will spread into a pandemic. To date fewer than 100 people have been diagnosed with the virus in the United States which makes a “pandemic” headline seem a bit early for a full-on panic attack.
Historically, when black swan events strike and market prices react, the best plan has been to step away from anxiety motivated decision-making and remain patient. Pause to review your near-term and longer-term goals. Do you have enough cash/money market assets to get you through the next 18-24 months? While we cannot anticipate what will influence markets and cause a sharp market sell-off, we do know a recovery in prices happens. We just can’t predict the timing.
Our client portfolios are not invested 100% in the stock market. By owning cash and bonds the portfolios are more broadly diversified to help you stay fully invested through market volatility like we are currently experiencing.
The unexpected action yesterday by the Federal Reserve to lower rates as part of coordinated effort with other global central banks is sending a strong message that policymakers around the world want to infuse stability for markets. We are hopeful bi-partisan fiscal policies out of Washington can be the next steps in leading us through the crisis of confidence.
If you have any questions or concerns please reach out to us –-> email or call 203-743-0131
Ali Cutonilli CFP®
Audrey Himebaugh CFP®
Marie Keefe
Michael Matson
For “Thoughts on the COVID-19 Outbreak” provided by Lazard Asset Management, please click link below:
Sources:
https://finance.yahoo.com/news/cornoavirus-mask-protection-195815084.html
https://www.medicalnewstoday.com/articles/256521#symptoms
https://www.washingtonpost.com/business/2020/03/03/economy-coronavirus-rate-cuts/
Michael Matson
Matson Financial Advisors, Inc
Financial Planning * Employee Benefits * Wealth Management
4 Mountain View Terrace Suite 104
Danbury, CT 06810
Phone: 203-743-0131 x211
Fax: 203-743-4086
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