The past two days have been very rough for U.S. stocks, having lost more than $1.7 trillion in market value, according to a report on Yahoo! Finance. The sell off stems from the concerns over the corona virus outbreak that has been causing chaos on an economy that has already showed signs of slowing down.
Will the Corona Virus Ruin the Stock Market?
Image Source: Financial Times.
I’m always one to let things shake out for a few weeks, rather than a few sessions of trading, and the article echoes my sentiment by saying that investors should stay the course and not make any drastic changes to their portfolio.
One of the worst things someone could do is make changes to their portfolio in reaction to the last two days.
-Tom Plumb, President of Plumb Funds
He went on to add:
But if you think your portfolio is too risky, you should develop a new plan over the next three to six months.
That’s some sage advice that shouldn’t fall on deaf ears. The sell off is real, and I’ve seen major moves inside of my personal holdings this week. Luckily, my retirement savings holds Kinross Gold Corp, which has remained stable after a one month trailing rally from $4.91 to $5.76. Pre-market trading today had the stock (KGC) trading as high as $5.90.
The Yahoo! article additionally added four pieces of advise to anyone with skin in this market, which I’ll outline and paraphrase below:
#1: Review Your Investments
Look over your long term goals, and assess how those could be impacted by this shaky market.
#2: Consider Lessening Exposure to Asian Stocks
The travel and retail industries in Asian will be impacted the most. if you are heavily invested in those sectors, look into moving that money.
#3: Take a Closer Look at Multi National Companies
Production delays due to any components or raw materials being sourced in China are affecting many retailers in the USA. Look into how the companies you invest in are structured, and where they buy their components from. If they rely on China in any way, shape, or form, take a closer look at how this could impact their business in the short term.
#4: Add Investments to US – Focused Companies
Look into businesses in the USA that focus on utilities, real estate, and household goods. Businesses that don’t rely on any production in China, basically. The article points to dividend paying stocks like At & T and Verizon.
Right now is not a time to panic! Although, I will say that I am a bit shocked that the cryptocurrency market has also suffered a major downturn. It’s no secret that even the top cryptocurrencies in the world can be highly volatile, but the 17% swings within 24 hours are a bit of a concern.
I’ll be back with more retirement news, and will be keeping a closer eye on this coronoavirus as it pertains to our long and short term investing goals.