As the Coronavirus pandemic unfolds, many of us are thinking as an investor, what should you do? We all wish we had the ability to anticipate market drops, move to cash, and get back into equities just at the right time to enjoy the recovery. I don’t believe there is anyone that can predict the perfect timing of those events or even come close.
The next best strategy is to stay the course, rebalance when the time comes and staying with your asset allocation. Now is not the time to change your asset allocation, but when the uncertainty starts to fade away the markets will begin to recover and that might be the time to review your asset allocation.
What can you do? Hold off on any expenditure you really don’t need right now. And try to avoid big ticket purchases that would require a capital withdrawal. You don’t need to stock up on toilet paper.
On a brighter note is US equity returns following sharp downturns. From the graph below, you can see that US equity returns have averaged 9.61% annually after sharp downturns. That’s a nice return not to miss out on. But to get the return, you need to stay invested.
We are here to help answer any questions you might have with your plan or portfolio, no matter what the market conditions may be.