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Secure your future against the CoronaVirus
Here at Freeman Capital we are committed to providing you with resources and information that will help ease your fears and answer the questions you may have especially during volatile and uncertain times.
Coronavirus continues to dominate headlines and yesterday we experienced the second biggest single day market decline since the October crash of 1987.
Fear is at the heart of every market drop. Usually, it’s fear of the unknown. In this case, there are several unknowns for investors to contend with. Why exactly is this virus spreading so fast? How far will it spread? How long will it last? These are questions that no financial advisor can answer.
But fear, as we know, is a bad reason to make decisions. Fear of missing out, for example, often makes us behave too rashly. On the other side of the coin, fear of not getting out leads us to toss away opportunities or abandon the progress we’ve made to our goals.
Fortunately, whenever we feel fear, there are tools that we can use to steady ourselves.
One tool is history. Past performance, as you may have heard, is no guarantee of future results. But past is also prologue, which means history can give us a good idea of what to expect in the future. For example, here is how the S&P 500 performed over a 6-month period after other recent epidemics.(1)
Epedemics and Long Term Impact on the Market
6-month % change of S&P
Now, these are all imperfect comparisons, as they dealt with different viruses, at different times, in different regions, in different contexts. The point is that the markets, while occasionally impacted in the short term by epidemics, are rarely impacted over the long-term. And as we are investing to help you achieve your long-term goals, it’s the long-term that we care about.
So if you are contributing to a brokerage or retirement account, now is the time stick with your plan and keep contributing to your accounts.
These are unprecedented times and over the coming weeks things are likely to get worse before they get better and the prospects of going into recession are becoming more likely (in fact we may be in one already.) So what should you be doing to prepare?
Do you have a fully funded emergency fund?
During a recession, you need to be concerned about job stability. The best way to hedge against job instability, is to have a fully funded emergency fund. We like our clients to have at least three to six months of their monthly expenses saved in a readily available fund, preferably a high yield savings account.
If your emergency savings is not where you’d like it to be, there is no time like the present to start focusing on it. Cutting back on unnecessary expenses and lowering your monthly bills as much as possible will help you build it up faster.
Recessions are scary times and hard to predict when they will happen. Now is as good a time as any to make sure you are financially prepared to weather through a recession and come out of it in a position of strength.
How We Can Help:
Freeman Capital Advisors is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.