You have likely heard news reports about the coronavirus and how it is impacting the world both physically and financially. As of this morning, Convid-19, the technical name for the coronavirus, has killed more than 2,800 people and has infected more than 83,000 in more than 50 countries.
This virus has brought great uncertainty to the global community. Not only is it unsettling from a human perspective as it robs people of their lives but from a financial perspective, it has a much broader reach, impacting millions of investors worldwide as we see how the global stock market responds. As of today, the stock market is on pace to have its worst week since the recession of 2008.
Three Reassurances For Investors
Amidst the stock market uncertainty, we are here to provide some peace of mind from a financial perspective. Here are three things to keep in mind as you are bombarded with dire headlines.
Only The Stock Market Is Down
If you have money invested with Guide Financial Planning, then not all of your investments are invested in the stock market. In order to provide a diversified, long-term portfolio, our clients usually hold a portion of their accounts in bonds. Even though the stock market is suffering greatly, bonds are actually up in value this week, which serves to counteract the negative impact of the stock portion of your portfolio.
The Stock Market Has Historically Risen Over The Long-Term
Despite many concerns in the US and globally over the years, the global stock market has continued to rise over the long-term. The image below shows a number of these events and how the global stock market has continued to grow despite several short-term losses.
Stock Market Drops Are Common
Stock market drops are not uncommon. In 37 of the past 70 years, there have been double-digit stock market corrections. In 22 of those 37 years, stocks finished the year with a positive return overall. Though we are not by any means suggesting that stocks will finish the year in the positive, based on historical data there is more than a 50% chance that they will.
Do You Need Help?
While it’s helpful to understand the historical trends of the stock market, a solid investment strategy is always based on having a strategic plan for your overall financial life. Do you have a plan for your finances? Are you confident that your investments are set up to weather storms like today’s so that you can achieve your life goals?
Though it’s impossible to know what the final devastation of Covid-19 will be, we are praying that it would be contained quickly for the sake of all those who are impacted. There isn’t a lot we can do to help those who have been infected, but we may be able to help you. If the current global uncertainty is making you nervous because you don’t have a plan for your finances, we are here to help. We can help you develop a financial map that will get you where you want to go in life and give you peace even during difficult times like we are experiencing today. Schedule a free introductory call to get started down the path to financial confidence.
About Guide Financial Planning
Guide Financial Planning is led by founder Ben Wacek, who is a Christian fee-only Certified Financial Planner™ and Certified Kingdom Advisor®. He has a passion to help people of all income levels make wise financial decisions and steward their resources from an eternal perspective using Biblical principles. Based in Minneapolis, MN, he works with clients both locally and virtually throughout the country and abroad. You can follow the links to learn more about Guide Financial Planning and our team and the services we offer.