You may have seen that world stock-markets have reacted to the spread of Coronavirus. Unsurprisingly, they have taken a sharp fall this week as concerns rise over the spread of the virus and, in particular, its potential economic impact. Markets don’t like uncertainty, but with the benefit of hindsight, I’ve no doubt that this will be seen as a very short-term reaction.
In the modern era, we have far greater access to world news at just the click of a button, or from flash news alerts on our phones. This is not always a good thing as newspapers and websites publish news stories that will attract readers. It can be all too easy to focus on these stories and get gloomy, disheartened or uncomfortable about the reported danger to life, society or wealth of these threats.
However, these world and health events have happened throughout history. Over the past 20 years alone, there have been many material events that we may have felt uneasy about at the time. During such times – at least from a market perspective – it can help to look at the past to ease our concerns. The past may not, of course, repeat itself but markets have been remarkably resilient and in all but the short term, this is likely to be the case with Coronovirus.
So, as is always the case, don’t be thrown off track by short term market uncertainty. If you have a plan and a portfolio that is designed to weather such storms then definitely the best course of action is to do nothing. If you do have any concerns please use this period as a chance to create a plan that works for you, no matter what life throws your way.