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Short-term Volatility: What's your move?

Christopher LaPorta

March 5, 2020


The financial markets don’t like bad news. The current coronavirus outbreak is no exception, and many investors are tempted once more to “do something.” But in times of volatile markets, the best move of all for long-term investors is often no move at all.

While they’re not exact parallels, the stock market responses to the SARS coronavirus in 2003 and the Zika virus in 2016 offer useful lessons. In both cases, investors who sold on bad news and falling prices missed significant rebounds that very shortly had stock markets back to prior levels.
There’s no guarantee that today’s market will play out the same way; stocks have also taken days, months or longer to regain losses. But remember that knowing when to get back in is just as hard as knowing when to get out.

The investment strategy I’ve mapped out for you is a long-term plan based on your personal goals and circumstances. Should those change, let’s talk about whether an adjustment to your strategy is warranted.