Coronavirus Market Volatility
As coronavirus fears take the market for a bumpy ride, the uncertainty can
feel scary. But it’s important not to panic. Before reacting to market turbulence,
keep the following in mind.
WHAT WE KNOW
While the unknowns surrounding the containment of the virus will likely cause more short-term market swings, there’s no current indication that these effects will be long term.
REMEMBER, THE MARKET IS RESILIENT
If past public health scares — like SARS, Ebola, and Zika — are any indication, the impact to the stock market could be short-lived.
MAINTAIN LONG-TERM PERSPECTIVE
While passion and emotion can be valuable character traits, they can work against you when investing. That’s because the average investor tends to sell when markets are low and buy when markets are high — the exact opposite of a successful strategy. By transferring out of lower performing funds when the market is down, not only are you potentially locking in losses, you’re also missing out on any upswing that follows.
REMAIN CALM AND STAY THE COURSE
Reacting emotionally during a market decline can ultimately do more harm than good. Remember that investing for retirement is a long-term prospect. The best approach to volatile markets is to determine your long-term investing strategy — and then stay the course.
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