Coronavirus, Markets and Economies: Four Little Reasons to Stay Invested

Coronavirus, Markets and Economies: Four Little Reasons to Stay Invested
In our last two posts about the coronavirus crisis, we shared five little things worth knowing, plus five little things you can do, to serve yourself well in the long run. One thing we’re suggesting most investors not do right now is dump their existing stocks or stock funds. Here are four little reasons why most investors should stay invested at this time. 

  1. If you have a financial plan, staying invested is part of the plan. If you’ve created a financial plan, and a balanced portfolio to reflect it, you should already have built in the necessary stops for dealing with times like these. By riding out planned-for risks, you can expect to eventually reap their planned-for rewards. If you instead abandon your plan in a downturn, you end up experiencing the risk anyway, but never receiving the expected reward. 
  2. Bear markets begin … and end. Bear markets are always tricky. The particulars are always different, making each one scary. But their commonalities are telling. We rarely know they’re coming until they’ve arrived. We don’t know they’re over until we’re well into recovery. Since no one knows where the top is, and no one knows where the bottom is, the safest strategy is to stay invested throughout. 
  3. Your investments can’t recover if you’ve sold them. Here’s another thing we know about markets: When they do recover, they usually do so quickly, dramatically and unpredictably. We can see spurts of 10%, 12% or more in a day. If you stay invested, your holding values will decline during the downturn, but they’ll be there for the full recovery when it occurs. If you’ve instead realized losses during a bear market, they’ll be permanent losses. Plus, you’re likely to miss out on at least part of the recovery by not getting back in before it occurs. 
  4. Your future self will thank you. While this is inarguably a scary time, it’s far more likely to be a footnote in the history of your investment journey, than its destiny. Someday, you’ll look back on the current crisis with a different, more informed perspective. Based on decades of historical market performance, we’re willing to wager that your future self, with its 20/20 hindsight, would tell your current self to stay invested for now. In fact, if you’re especially risk-tolerant, you may even want to take advantage of the reduced prices, and “stock up” on stocks. 

While you’re waiting for this bear market to pass, we hope you’ll check out our “Think Smart” podcasts, including the one that inspired today’s post, “Coronavirus: Working from Home.” In the podcast, we also discuss some of the measures we’re taking here at The McClelland Financial Group to keep our clients and ourselves safe. Let us know if we can assist further.

Related articles

The Financial Implications of Divorce

In this episode of Think Smart with TMFG, Rob McClelland and Mike Connon unpack the unavoidable financial challenges of divorce. They paint a detailed picture of financial complexities that couples should be aware of at the onset and conclusion of a …

Read More →

Episode 29: Becoming A Great A Client Takes A Little More You Might Expect

Becoming a good client requires a great advisor. The importance of having sound advice and taking it. Savers vs. spenders and what it can mean to the future of your plan. The importance of goal setting and finally muffins are they really where it’s a…

Read More →

Episode 33: Technology: Making Us Way Better At What We Do!

Technology has had a huge impact on financial services. Market efficiencies are translating to enormous benefits for clients. Listen here today for more insights in part 2 of our debrief of DFA’s Charlotte, NC conference.

Read More →

Financial Planning Advice from Canada's Top Financial Advisors

Sign Up To Receive Email Updates On The Financial Industry And Complimentary Workshops.

By providing your e-mail address you provide The McClelland Financial Group of Assante Capital Management Ltd. with your express consent to send you electronic communications. If you choose to discontinue receiving e-mails, you may withdraw consent by contacting [email protected].

FREE RESOURCE

Get actionable financial insights from the Top financial planners in Toronto.

Toronto's Top Financial Advisors
Copyright Assante Wealth Management. © 2022

Disclaimer | Assante advisory services are offered through Assante Capital Management Ltd. Assante Capital Management Ltd. is a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. The services described may not be applicable or available with respect to all clients. Services and products may be provided by an Assante advisor or through affiliated or non-affiliated third parties. Some services and products may not be available through all Assante advisors. Services may change without notice. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

We have a team of advisors each specializing in varying portfolio sizes. Please let us know the approx. amount of your investable assets to help us to direct you to the advisor that is best suited to you.