Risk Aversion – Is It a Fad or a Trend?
The Spreading Concerns from the Coronavirus

With all of the angst appearing in the financial markets, the Coronavirus (COVID-19) has finally made its mark in history as probably one of the most talked about subjects on social media.

We have read quite a bit about the statistics and background on this potential pandemic that has started to spread like mushrooms from China to 6 continents. As human psychology would have it, fear begets fear and we are seeing plenty of that expressed by a change in short term behavior by investors, consumers and businesses. Is much of this different than market reactions like 9/11 or the SARS outbreak?

As we stated in our piece last month, eventually these fears subside and are forgotten, and the economy will stabilize.  But what is going on now is a real concern and the health of humanity is a global concern that we all can unite on. We will give you one point of optimism that is not being discussed yet.  Survival and recovery rates.  According to: https://www.worldometers.info/coronavirus/  as of 2/27/2020, of the diagnosed COVID-19 cases, over 37% of patients have FULLY recovered from the virus.

What should you do in response to this crisis?  Our continual mantra is to make sure our clients are diversified with an asset allocation that helps reduce the impact of significant equity downturns.  This usually includes a healthy allocation to bonds and liquid alternatives to counter-balance market volatility.

If you would like to read more commentary about the impact of COVID-19 on the global markets, here is a great piece we found from @LizAnnSonders at Charles Schwab & Co.

 

← Back to Insights

Principal & Financial Advisor

Start investing in your future today.

Contact Us