The corona virus scare has shaken our entire nation and the globe. People are stocking up on rice, hand sanitizer, and bottled water. Shelves are bare. Flights are being canceled left and right. And the stock market…let’s just say the stock market hasn’t been spared.

When trade with China—one of our biggest trading partners—is disrupted, you know the market is going to take a hit. We are a truly global society, and when a manufacturing giant like China becomes impaired, the whole house of cards can come tumbling down.

Because investors are afraid of how badly the corona virus might disrupt industry, trade, and manufacturing, they have started to panic. The Dow and the S&P 500 have taken a major nosedive, and the Cboe Volatility Index (known as VIX) is at the highest point it’s been since 2009.

But here’s the thing: pulling your money out during a downward slide won’t do you much good. It’s investing 101: buy low, sell high (NOT the other way around!). If you’re offloading your stocks when the market has tanked, you’re selling yourself short. It’s better to take a deep breath and simply wait until the market corrects itself, as it always does.

I know, it’s difficult to sit tight and resist pulling your money from the market when you see your stocks losing value, day after day. But, here’s the thing: We’ve been through this before. The stock market has slid into some pretty precarious territory, but it has always righted itself.

Historically, it’s best to leave your money alone and weather the storm. You might even consider buying some stocks while the prices are low (be sure to consult your financial advisor first). Another option is to rebalance your portfolio—shifting your asset allocations to reflect their performance. But simply yanking out your money is the type of knee-jerk reaction that could get you in trouble in the long run.

If you’re feeling nervous about your investments, please don’t make any moves before talking to a qualified financial advisor. We’ve been through rough times before, and we can pull through together by keeping level heads and not letting our decisions be driven by fear.

 

Leave a Reply