Is The Coronavirus a Long-Term Threat to Your Retirement Savings?

Is the Coronavirus a long-term threat to your retirement savings?  This question weighs on the minds of many as the news dominates the headlines.  We try to add some perspective in this week’s episode of Monday Morning Money.

Watch: Is the Corona Virus a Long-Term Threat to Your Retirement Savings?

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The Coronavirus is a Big Deal

According to the World Health Organization, the Coronavirus outbreak has reached pandemic levels. Over 20,000 have contracted it.

At times, the stock markets have reacted harshly to the news. On January 31, The Dow dropped by more than 600 points. It was the biggest drop in months, and it was easy to blame the virus for the fall.

The Big Question: Is the Coronavirus a Long-Term Threat to your Retirement Savings?

This isn’t the first major viral epidemic we have seen. In 2003 it was SARS. The bird-flu hit the headlines in 2005. We saw an outbreak of the swine flu in 2009. And then we faced the Ebola scare in 2014. All had their own short-term impact on the financial markets.

This outbreak will have a short-term impact as well. But, history tells us the hype will likely be far worse than the actual impact to the world’s economy.

Always a Reason for Doom and Gloom

There is never a shortage of excuses to sell stocks. When you look back over the past 20 years or so, you can find many reasons for doom and gloom. We have seen virus outbreaks. Lehman Brothers and General Motors filed for bankruptcy. We endured government shutdowns and massive one day drops in stock prices. And for some, the election of President Trump was their reason to abandon stocks.

But the impact of any of those excuses was temporary.

The SARS virus first made headlines in February 2003. Now 17 years later, the stock market has increased by 441%. That includes the returns from dividends.

Coronavirus long-term threat to retirement savings
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Short-Term Interruptions

Our experience shows things like the Coronoavirus outbreak are short-term interruptions to the long-term growth of stocks. So the impact to your savings from this outbreak will most likely be short lived.

But don’t worry, the financial media will have another reason for doom and gloom shortly.

What's On Your Mind?

Do you have a question about what’s happening in the world of finance or investing?  Is there a topic that has you curious?  We’d love to hear from  you.

 We’ll do our best to answer it in a future episode.  To submit your question, fill out the form.  If you prefer, you can send us an email directly.  That email address is neal@flemingwatson.com

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Financial Planning

About the Author

Neal Watson is a Certified Financial Planner™ Professional and a Financial Advisor with Fleming Watson Financial Advisors  He typically works with people who are planning for retirement.  Fleming Watson is a Registered Investment Advisory firm located in Marietta Ohio.  Our firm primarily serves Marietta, Parkersburg, Williamstown, St. Marys, Belpre, Vienna and the surrounding communities in Washington and Noble Counties in Ohio and Wood and Pleasants county in West Virginia.

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