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As you may have heard by now, Coronavirus is now having a significant impact on the world’s Financial Markets.

Over the last week there have been reports confirming that with the spread of the Coronavirus, it has sent stock market investors into panic stations with pre-market futures contract trading suggesting a potential 900-point drop for the Dow Jones Industrial Average.

People have been asking whether or not they should pull their money out or start selling. Historically, selling after a big drop is usually a bad move. There are many examples of huge rebounds after big crashes – 1929 and 1987 market crashes being prime examples.

If you decide to sell due to panic, then you might miss out on the big bounceback that usually proceeds after. This will then make it harder to get back into the market if you try to later on. For reasons on why not to panic, check out this article by Dan Caplinger – Reasons Not to Panic-Sell Over the Coronavirus Outbreak

The most important asset available right now is “Time”. Time for you to plan and prepare, Time for the Coronavirus to pass, Time for the markets to recover on the news that this has occurred, Time for confidence across all affected countries to return and the vibrancy and confidence of the world economies to again be experienced.

The Coronavirus is a biological impact affecting economies through lower tourism, social activities and consumer demand affecting supply for stocks eg Apple products, luxury items, holidays etc.  Unlike the GFC which was experienced through poor corporate practices, ineffective governance and deceitful conduct. 

There is a lot of anecdotal evidence to support that those who did “panic sell” during the GFC had wished they did not when the value of the stocks returned, the opportunity to now purchase lower-cost stocks is something to be considered.
If you have any questions, please do not hesitate to call our office on (07) 3806 4484 or email us at gday@hannans360.com.au.
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