Broker Check

"What, me worry?"

February 27, 2020

Worry has gripped the stock market recently with the outbreak of the Coronavirus.  It has long been said the two drivers of the stock market are fear and greed.  It is obvious which one has a grip on the steering wheel right now.  The Coronavirus is a serious issue and numerous experts already predict that China will have negative economic growth rate in the first quarter of this year.  Remember though, that the market often overreacts on the upside when things are good, just as it can snowball downhill when problems arise.  Historically, a sudden steep drop in values has been followed by a sharp rebound when a resolution is in sight.  The problem is that the timeline is unknown until after it passes. 

The market had been hitting repeated highs in recent months.  A market correction can be healthy in that it brings valuations down to a more reasonable level which then leads to another growth run.  Also keep in mind that good years often have a rough patch in them.  In 1987 on Black Monday the Dow fell over 22% in one day.  But for the year, the Dow had a positive return!  Let us know if you are worried, we are here to help.

All of us can probably think of things we did growing up that seem silly now or out of character for ourselves.  When I was in Junior High School, I had a subscription to MAD magazine for a couple of years.  So maybe it’s not a surprise that I still read the comics in the local daily paper.  The covers of MAD magazine usually featured the goofy character Alfred E. Neuman, he was a bumbling character who looked like he should be worried about his adult life.  However his signature line was “What, me worry?”

Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.