“Paranoia strikes deep, into your life it will creep…” Buffalo Springfield
It can be excruciating to watch your accounts sink so low. Ouch! Although most investors knew this financial storm was coming…we didn’t know when, how fast, and how much havoc it would wreak on our accounts. The coronavirus has now permeated every corner of our world. We think hand sanitizer, canceled events, travel refunds, and staying home from work or school. Some clients have even asked about postponing their retirement or cutting back their expenses. There is probably no logical reason for you to make a dramatic monetary shift because of the coronavirus.
This is not the Titanic. As the captain of your financial ship, I can see clearly up ahead. I’ve been in this ocean and in the middle of this kind of storm many times. The 70’s gas crisis, the 80’s worldwide banking crash, the tech wreck in 2000, 9-11, and the mortgage crisis in 2008…to name the big ones. We are not headed for a massive glacier and an icy grave. These are very rough seas, but this storm shall pass.
One client asked if her account value could go to zero. If your basketful of 100 good companies all went bankrupt, it is technically possible. But, let’s not give in to extremes or allow this crazy fear to pervade our psyches when it comes to common sense. Do you think Apple will cease making phones, the NCAA will stop playing games in the future, and Disneyland will be closed forever? History tells us that a solution for this virus is surely out there to be discovered. With billions of dollars at stake, biotech and pharmaceutical companies are racing to be the first with the answer. History also has shown us that the markets go up rapidly after a serious virus is controlled. We have had SARS, Ebola, HIV, and Zika as historical examples of this fact.
What can we do about this angst? What is reality versus perception? First, you and I cannot control this virus. We cannot control the stock market…but we can control our reactions. We can control our hygiene. We can control our attitude. Second, the formula that works best for investors is to buy low and sell high. This is the time to buy. People are scared and prices are low. Third, we can choose to limit and to filter out the “experts” and their predictions. Hasn’t one doctor or scientist claimed the cure is a month away, another one says it’s six months away, and another declares two years? How do they really know? I think most of them are just guessing. Fourth, you can confirm your investment time frame. If you are a long-term investor, try not to act in a short-term way. With few exceptions, if you have a good investment today, you should like this same investment a week from now, a year from now, and five years from now.
“If you can keep your head while all about you are losing theirs…yours is the earth and everything in it.” Rudyard Kipling
Remember…you don’t gain or lose any money until you sell. It makes no difference if your home is valued lower today than it was last month, or higher than it was a year ago. It only has true meaning and a real price if you sell it. We tend to recall mostly the high points of our investments. Unless you are forced to sell at these recent low points, you haven’t lost anything…except perhaps some sleep.
“You gain strength, courage and confidence by every experience in which you really stop to look fear in the face.” Eleanor Roosevelt
We have learned that Tom Hanks and Rita Wilson have the coronavirus. They are quarantined and being treated in an Australian hospital. Since Forrest Gump was always able to find his way to success in the movie, we have a feeling that “Mr. and Mrs. Gump” will recover fully and help lead us through this uncomfortable time with big smiles and positive attitudes.
All is well here at Pacific Sun Financial. Admittedly, we have tried to arrange our times for “reassurance” until after 1 PM. Prior to the market closing almost every day these past two weeks, I have been concentrating on buying good investments that are “on sale” for you.
On a personal note, many thanks to all of you who sent messages of your concern for our well-being. We have a relationship with our clients beyond money management. We care about you and you care about us. We thank you for your trust and confidence, especially in these unsettling times. Your financial health and happiness continue to be our highest priority.
Hopefully, the panic will subside soon, life will be good again and so will your investments.
Mitch Fisher