In the midst of the COVID crisis, I am determined to be a voice of reason and a calming presence. My hope is that my role as a financial advisor will convince people that everything is OKAY, and we will not only get through this pandemic, we will emerge stronger and better for it.

How on earth can I be so optimistic?

For one, in the financial world, this is nothing I haven’t seen before. Yes, the rapid downward slide of the stock market has been scary for many people. Yes, we have seen several small businesses struggle to stay afloat during this time. BUT, the overall picture is not so bleak.

When I had to handle the financial downturn of 2008, the big picture was much worse for my clients. The housing bubble burst, Lehman Brothers went belly-up (a problem for many of my clients, who had as much as 90% of their investments tied up in Lehman Bros), AIG failed…etc., etc.

Today’s financial downturn started from a more solid foundation. Regulations are stricter for purchasing houses, which prevents people from making a major purchase that they are not equipped to make. Unemployment was at rock bottom before the COVID panic (with only 3.5% of people out of work right before the pandemic). Plus, businesses have been able to keep a larger percentage of their profits, due to the business tax cuts that went into effect in 2018 (meaning that they should be better equipped to hire people back once the COVID crisis has passed).

Not to mention, the average American had more money socked away in savings before the pandemic struck than they did in 2008 (7.6% in 2019, compared to only 3.6% in 2007).

What’s more, our nation (and our world) have been through plagues before. There was the HIV/AIDS crisis in the ‘80s, SARS and Bird Flu in the early 2000s, and the Swine Flu and Zika virus fairly recently. We were able to pull through those pandemics (which were quite deadly in some cases) without as much panic as we’re currently experiencing.

Why? Why is COVID-19 so different?

I believe much of it has to do with mass panic and hysteria. In his blog, Seth Godin writes, “If you’re on a crowded plane and one person is freaking out about turbulence, the panic will eventually peter out. If, on the other hand, six people are freaking out, it’s entirely possible that it will spread and overtake the rest of the plane. Panic needs multiple nodes to spread.”

He goes on to say that Twitter and other social media platforms have helped to amplify the fear, and have propelled this crisis into something worse than it actually is.

My advice:

KEEP CALM and talk to your financial advisor. Many of us agree that not only is there no need to panic, this is actually a golden opportunity to buy into the market at an unprecedented discount. Though this isn’t a strategy for everyone (again, talk with your advisor), this is an opportunity for long-term investors.

Hang in there! We will get through this, and we will be stronger and better for it.

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