January has been a very volatile month on the stock market. For this conversation, we are using the Dow as the market, as most of you do. In the end, the month is down only about 280 points, which is insignificant. However, from January 17 to January 31, the market has lost about 1100 points. That drop is due to the fear regarding the Coronavirus. That will be the topic of this newsletter.
A very big event happening in the world today is the Coronavirus outbreak in Wuhan China. The stock markets, due to fear about its effects on business and commerce, are very spooked. Businesses in China or businesses exposed to China are certainly feeling the stress. Travel industries would be an example. While we are not scientists that can comment on the virus itself, we know enough about financial/economic history to know that the effect on the stock markets will likely be temporary. The stock markets have survived a lot of bad things. They have survived wars, depressions, terrorist attacks, various diseases, etc. Historically, after every disaster, markets eventually recover. There is absolutely no reason to believe that this time is different, so that pattern will likely continue. Eventually, the marketplace will adapt. New companies will form, old companies will go out of business, and life will move on. And, the travel industry will recover also.
If you have been reading the newsletters for a while, you have probably seen us write about the importance of sticking to a plan. The markets are volatile, they always have and likely always will be. The future is unknowable. All you can do is have the discipline to adhere to the plan that you agreed to when you hired us. That plan is designed to achieve the objectives you want. If your risk tolerance or objectives change, then we can all collaborate on designing a new plan for you. However, fretting about the markets does nobody (especially you) any good.
If you have any questions about your plan, 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.
Questions for the comments
Did my newsletter make sense? Do you agree or disagree with what I said?