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STOCKS AND CORONAVIRUS — Could this be a time to buy rather than panic?

STACEY WALL

By BECKY GILLETTE

While the steep declines in the stock market in the past week have been scary, they aren’t unprecedented, said Stacey Wall, CEO of Pinnacle Trust in Madison. Usually the markets bounce back quickly.

“In fact, in the past six day-to-day declines of 3 percent or greater, the market rebounded higher a month later,” Wall said. “Times like this are when investors most need a trusted financial professional. During periods of market volatility, having a plan and sticking with it almost always proves to be the best course of action.”

Risk-appropriate, properly diversified portfolios are crucial. Wall said if you have a long-term outlook and can handle market volatility, this could represent a buying opportunity. 

READ MORE: Few businesses untouched by concerns about COVID-19 virus

“The economy has remained strong, and all indications from Washington are that a pro-economic environment will continue,” Wall said. “With unemployment at all-time lows, the consumer (which represents 70 percent of economic spending) has been the backbone of this economy. Interest rates remain historically low and the Federal Reserve has given no indication of increasing rates in 2020.  Low interest rates are a tail-wind for equity valuations and a deterrent for investing money in the bond market.”

However, some economists are concerned the fears of the COVID-19 could lead to more people forgoing vacations, eating out, attending large gatherings such as sporting events or even going to school.

Some Asian businesses including restaurants and stores in the U.S. have reported serious declines in business. An article on CNN is headlined: “What’s spreading faster than coronavirus in the US? Racist assaults and ignorant attacks against Asians.”

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About Becky Gillette