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Coronavirus Fear And Investing For The Long Run

Published Tuesday March 10, 2020,  8:30 p.m. ET

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(Tuesday March 10, 2020,  8:30 p.m. ET) - Seeing the stock market plunge on news about Covid-19 is unnerving but is not so unusual.

It's human nature to get worried amid a market plunge and think this is the plunge from which there is no recovery.

Coronavirus is not the first time investors faced a crisis that seemed like it could break the world's financial economic system.

In the 1962 Cuban missile crisis, investors undoubtedly wondered, "Is it different this time?"

The 1973 oil embargo, 1987 stock market crash, 9/11 terrorist attack, and 2008 financial crisis were similar times of rampant fear.

Psychologists theorize people use their "caveman brain" to explain why people often react emotionally to market plunges. Humans are hard-wired to run from danger.

While we are obliged to disclose that past performance is not a guarantee of what will happen in the future -- this time indeed could be different -- we are also obliged to say as prudent investment advisors that the world has a strong record of surviving terrible crises, at least since 1957.

Your caveman brain may need to be suppressed to protect yourself in the modern world.


Nothing contained herein is to be considered a solicitation, research material, an investment recommendation or advice of any kind., and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. The material represents an assessment of financial, economic and tax law at a specific point in time and is not a guarantee of future results.

Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market-value weighted index with each stock's weight proportionate to its market value. Index returns do not include fees or expenses. Investing involves risk, including the loss of principal. Past performance is no guarantee of future results. Return and principal value of an investment will fluctuate, and when redeemed, may be worth more or less than their original cost. Performance statistics quoted here may be lower or higher now.

This article was written by a professional financial journalist for NFI, LLC. and is not intended as legal or investment advice.

© 2022 Advisor Products Inc. All Rights Reserved.

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