February has not been a good month on the stock market. The Dow is down over 2800 points. The reason is fear regarding the Coronavirus. Therefore, the Coronavirus will be the topic of this newsletter. While we have already talked about this topic in a previous newsletter, we feel it is pertinent to discuss it further.
Due to the various quarantines, a lot of people are unable to go to work or go outside. Due to a general aura of fear, people are scared to go out and shop. All of these things are terrible for the word’s economy. However, it is temporary. Can you honestly tell us that you think this disease will be the end of the world? The world has dealt with massive disease outbreaks before. Coronavirus is a category of virus. The current Coronavirus that the world is facing is named COVID-19. The world has already dealt with another type of Coronavirus. In November 2002, the world faced a Coronavirus named SARS. By 2004, the problem had been dealt with and there were no more cases of SARS. The world did not end. Since the first SARS infection the DOW has nearly tripled. We don’t see any reason to believe that this Coronavirus outbreak will affect the world any differently than the last one did.
While it’s scary, it’s important to have the discipline to stay invested. Despite the volatility and the price drops, over the long run, the stock market is one of the most potent way to create personal wealth that exists. If you have the discipline to invest every month into the stock market (despite the volatility), then due to compound interest, when you retire you will likely have a sizable nest egg built up. Sure, there’s risk that the markets will be depressed when you need the money, but everything in life that’s rewarding entails risk. Obviously, you have to judge your needs and risk tolerance but we believe that is worth the risk. In our personal portfolios, we have invested more during these tumultuous times.
If you have any questions about your investments, please call at any time. We sincerely hope you got value from this newsletter. We appreciate your business and trust.
Dan and Eli
As I’m writing these to help my readers, I would be very appreciative of any input in regards to what I should write next. If you want me to write about a particular topic, please contact me. Please contact me if you would like to submit a post to my blog.
If anything that I mentioned above interests you, please consider downloading my free e-book. The book contains my thoughts on investment management and some information that I think everyone should know. You can also download it below.
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