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5 Reasons NOT to PANIC about the Impact of Coronavirus on your Investments

As the impact of COVID-19 continues to spread across the world, many investors are growing increasingly concerned, not just about their health and that of their families, but about the impact the virus could have on their finances. Fears about the spread of the virus and its impact have already caused the stock market to plunge, and many investors fear the impact it could have on the world economy in the future.

In reality, however, it’s important not to panic about the impact of coronavirus on your investments. In fact, this is a great time to sit back and look away from your portfolio. Consider these five reasons to avoid panicking as this global pandemic continues to run its course.

1. Most investments will correct themselves over time.

Right now, if you have investments in the stock market, you may be nervous or even fearful about the losses that you’ve already taken. In reality, however, if you have a diverse investment portfolio–something that every investor should focus on anyway–your portfolio will more than likely correct itself over time. Investment is often a long game. In the aftermath of the COVID-19 outbreak, it has become even more critical to play that long game and be prepared to wait it out.

2. Panicking and pulling out your investments now could cause you to lose more money.

As investors continue to panic, it has an even more intense impact on the market as a whole. This could cause a wider number of investors, worldwide, to lose the funds and efforts that they’ve put into those investments. Even more critically, if you pull your investments out now, it could cause you to miss out on the market correction that will eventually come.

3. Consumer confidence remains resilient, protecting the housing market.

Consumers have plans for their lives. They still intend to buy houses, including vacation homes. They still need places to live. Ultimately, consumer confidence remains resilient in the face of the novel coronavirus–and in the long run, the housing market will likely recover. While you may notice some short-term losses if you sell a property immediately, if you ride out the panic, your property’s value will probably grow back to its former level.

4. Many markets could actually get a boost during the recovery period.

Right now, many businesses–and many markets–are in reaction mode. That can mean significant short-term drops. When the recovery period comes, however, you want to be positioned to take advantage of it. As the economy recovers, between government stimulus packages and consumers returning to their normal buying habits, many markets will see a substantial boost that could help you, as an investor, recover many of your losses.

5. Sometimes, doing nothing is the most important tool in your investment arsenal.

Many investors struggle to ride out highs and lows in the market. You may be tempted to invest as much as you can in commodities that are low now, but that are anticipated to rise soon. Likewise, you may be tempted to pull out most of your investments and hold cash until the crisis passes. In situations like this one, however, your most valuable response is to do nothing. By waiting for the market to correct before you make critical financial moves, you’ll find that it’s much easier to achieve your overall financial goals–and you can often protect those critical investments at the same time.

If you’re worried about your financial portfolio in these troubling times, you don’t have to handle them alone. If you have doubts about your current financial management strategy or need to discuss diversifying your portfolio to help protect your investments, contact Claire of FH Manning Financial Services by phone or email clm@fhmanning.co.uk.