March 13, 2020
It looks like the world is in a bit of panic. Kids are getting an unexpected break from school. Some of the Ivy league universities have actually kicked the students out of the dorms, sending them back to their respective communities to “spread” the word. There are even open seats on domestic flights; I have not seen that in a quite a while.
Fear has consumed us. What should we do?
First of all, it is perfectly okay to feel fear. Just don’t let fear guide your actions in a way that will work against your own best interests.
The current COVID-19 (COrona VIrus Disease – 2019) pandemic is spreading throughout the world very rapidly and has invaded our shores. No one has a clue as to how many Americans are infected because there are not enough testing kits available! That is right, we do not know how many people are infected and who they are. In the absence of data fear and uncertainty take over, and we naturally imagine the worst.
If we knew who was infected would could take care of their medical needs and quarantine them in order to protect the rest of the population. Since we do not know who is infected, we are forced to blindly quarantine everyone, everywhere. That is pretty challenging, and pretty scary.
The economics of our current world is very dependent on the free and generous flow of people and products. Arresting such movement puts much of the world’s economic activity on pause, until such time as we get a better handle on the situation and start returning the world back to normalcy.
The stock markets around the world are trembling and tumbling. The way I see it is that the short-term, and very steep, movements of the markets are an accurate reflection of our collective human emotion. And the predominant emotion is fear. Fear and panic often pull markets down fast and furious, to levels that may overshoot to the downside relative to historic long-term fundamentals. Fear-driven selling is most often harmful to the investors’ best interest in the long run. However, that uncomfortable feeling can create an almost irresistible urge to act.
It is these times of crisis that determines and separates the experiences the that people will enjoy, or suffer in the long run. Do not act out of fear. Keep your eye on your long-term goals and dreams, and only take action that will move you towards them. And if fear overwhelms you and the urge to act on it becomes overbearing, pick up the phone and call me.
As we watch with bated breath to see how this crisis unfolds, remember to frequently and generously wash your hands and disinfect surfaces that you and others touch (including phones, tablets, computers...). Stay informed (www.CDC.gov) and maintain your calm, your optimism and your health.
“This too shall pass”
Abraham Lincoln, September 30, 1859
Best,
Daniel Ruben, MD, MPH, MBA
The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.