By Cleona Kinahan M.Sc CFP® QFA FLIA
What does the coronavirus mean for Investors?
Stockmarkets across the world continue to tumble as governments struggle to contain the spread and impact of the coronavirus. This is having a significant impact on the value of investments & pensions if they are linked to these markets. So, what does this mean for investors?
We can’t predict the long-term impact the virus will have on investments however before making any decisions regarding your investments take a breath, remember your plan, and if you’re concerned talk to us.
In reality, volatility does not hurt investors, but selling when the market is down will only exacerbate your losses. Do not diverge from your long-term financial objectives because of short-term market fluctuations. You will have discussed your risk tolerance with your financial advisor and they will have put together an investment strategy based on your risk appetite and your projected returns.
Volatility and market declines are stressful but inevitable. Short-term volatility, as we are experiencing now, means very little over a 5-year period. Always remember one of the core investment facts, volatility in markets is no risk when you have a long-term strategy. These events represent a sale for those saving money on a regular basis. There will always be periods of volatility and extremes when it comes to certain investments, your job, and the job of your advisor is to figure out what you want to do about it. Also, keep in mind that while the stock market may be down, your portfolio may be made up of both stocks, bonds, and other assets that are designed to work together to decrease overall losses in times like these.
At times like these, it’s important to put current conditions into perspective and not let our emotions dictate our actions. This is not the first time the market has taken a tumble and it won’t be the last. Hang tight. Stay focused on your long-term goal. An investor with a well-thought-out financial plan will know exactly what risk they can tolerate, how long they can afford to invest for, and what they can expect from their investment. The lower price of stocks right now represents a real opportunity to buy more of them with your money.
Don’t let your emotions take control
Ignore the noise. Yes, the markets have taken a hit but if the last 100 years are anything to go by they will recover. The Coronavirus has caused worldwide disruption not just to the financial market. At O’Leary Financial Planning we ensure our clients have a diverse investment portfolio to take account of volatility and downturns in the market and to lessen the blow for investors. Will your investment take a hit, probably, in the short term anyway, but history has shown time and again that the markets recover. It’s important not to let your emotions dictate your actions.
Talk to your financial advisor
If you’re worried about your financial plan or you haven’t had a review in a while, get in touch with us. We’ll take a look at your portfolio and offer recommendations to minimize potential losses if appropriate. Human nature causes us all to act out of emotion when our investments go down. If you’re still worried, call us. You can’t control the markets but you can control what you do with your own money. Stick with the financial plan you’re worked out with your financial adviser. Stay focused on what you can control and if you have any fears, questions or concerns call us on 091 778677 or click here to request a call.
“If you aren’t thinking about owning stock for 10 years, don’t even think about owning it for 10 minutes” – Warren Buffett