In the past few months, we have watched our world change in light of Covid-19. Health, safety, and financial security are leading concerns. Global economies are weathering and preparing for the aftermath of the Coronavirus. Headlines are constantly updating and it is easy to get sucked into the ‘pandemic watch’.

Uncertainty can breed discomfort and fear. And when uncertainty continues, the market follows. So, how do you weather the storm?

As the market pitches, our first instinct is probably to protect our hard-earned investments. Both clients and friends have asked me the same question. It goes along the lines of: “Should I sell now and buy back in when the market really drops?” Translation: Can I protect what I have now before I lose more - but continue to invest and earn in the long run?

My opinion: Do NOT time the market. Assuming you are diversified and your investments coincide with your financial plan, you will want to wait this out and avoid a ‘head-fake’.

Time in the market - not timing the market. Some investors may be tempted to pull out of the market and avoid the bad days. However, it is impossible to predict when the good and bad days will happen. Here’s an example: Let’s say you invested $10,000 in the S&P 500 index on January 1, 1980. By December 31, 2018, that same $10,000 would have grown to $659,591. If you missed the best 30 days of the market during that 38 year period, your $10,000 would have only grown to $125,094.1

As financial advisors, it is difficult to predict what will happen in the short term. We don’t know exactly how this will play out. We can, however, use past examples of stock market volatility to make rational and informed decisions. After all, our end goal is to help protect our clients.

This is not the first time we’ve seen the market waver in the face of a global event. Almost every decade of the last century saw its fair share of movement. And through ups and downs, one thing stayed the same: we recovered.

My main takeaway: If history has taught us anything, it’s that we, and the market, are resilient. None of us can know for sure what will come of the Coronavirus, or just how exactly the market will be affected in the long run. If you are working with a qualified financial advisor, chances are your portfolio is already well-allocated and your investments are properly diversified to handle market fluctuations.

More than anything, this is a time to stay connected as a community and to focus on what really matters in our lives. Support your loved ones and those around you. We will get through this, together. And remember: cooler heads prevail.

Glen D. Smith, CFP®, CRPC®
Chief Executive Officer | Chief Investment Officer | Founder

GDS Wealth Management is not a registered broker/dealer and is independent of Raymond James Financial Services. Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Any opinions are those of Glen D. Smith and not necessarily those of RJFS or Raymond James. As Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Past performance may not be indicative of future results. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Investors should consult their investment professional prior to making an investment decision. Expressions of opinion are as of this date and are subject to change without notice.


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