It's been a rough week for the markets, so I wanted to hop on and share a few quick thoughts prior to us all heading into the weekend.
- Be careful of the news in general, but especially during market panics like this one, and also of headlines. While you have probably seen the headline "Dow had largest point drop ever yesterday", according to LPL Research, it was the 125th largest drop from a percentage perspective. Sounds way different, huh?!
- Remember that enjoying good long-term results in investing is all about managing our behavior and emotions. As we always share with Clients, we have to focus on what we can control. and what we CAN'T control is the coronavirus, what the market does on a daily basis, or the news. What we can control is having a solid financial plan and working that plan, our mix of stocks and bonds, also known as asset allocation, and our emotions - not panicking and making fear-based decisions based on short-term events when most of us are working on decade-long goals.
- Valuations or how expensive stocks are were pricing in perfection, and as we all know, perfection doesn't exist, so the markets were looking for a reason to sell-off, and that reason is the coronavirus
I'll close with this: while there will be a negative economic impact to the Coronavirus, we see it as a delay, not an end to the global acceleration story that began with December's US/China trade deal. Corrections are, as you know, a common occurrence with the average S&P500 draw down being about 14% per year over the last 20 years according to JPMorgan.
Tomorrow is a leap day, so we all have an extra day this year. I hope you enjoy it, thank you for watching, and as always if you have any questions or want to discuss your particular situation, please reach out.
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