The Effect of Pandemic on the Markets

In today’s challenging times, Edward Jones financial advisors are thinking about the health of their clients, their families and their colleagues, what’s happening in their communities and the effect of COVID-19 on the markets.

“Most importantly, we want everyone to know we’re taking steps to protect the health and well-being of our clients, associates, families and communities,” Michelle Willingham says. “We’re right here in the community with you, going through this together as neighbors and friends. And we will get through this together.”

To help reduce the impact of the coronavirus, financial advisors are taking several steps, including suspending face-to-face visits with clients, holding virtual meetings and training sessions and ensuring office spaces are sanitized and disinfected.

“Like everyone, we really have to do our part to help mitigate this crisis,” Willingham says. “But since our entire reason for being in business is to help our clients enjoy more rewarding lives, we feel that our efforts now are just an extension of that.”

Of course, people’s financial situations also weigh on their minds, Willingham says.

“The current market selloff is certainly concerning, but it seems to be driven more by fear and panic than by economic or financial reality,” Willingham says.

Monetary and fiscal policy are necessary, but at the end of the day, it will be the medical progress that will dictate the timeline for reducing market volatility and the ultimate rebound in stocks, Willingham says.

Willingham said Edward Jones expects daily volatility to persist until new virus cases begin to slow, but added that investors should find optimism in these facts: unemployment is near a 50-year low, with solid wage growth; there’s been an uptick in the housing market, which may accelerate due to declining mortgage rates; and the Federal Reserve has cut short-term interest rates back near 0 percent.

Furthermore, Willingham says, the drop in investment prices may indicate that the financial markets have already “priced in” the likelihood of a short-term recession.

“This could mean that we’ve already endured much of the stock market pain,” Willingham says. “And even a short recession is of concern to all of us, since it’s likely to bring at least a temporary disruption to an otherwise strong labor market.”

For investors wondering what to do now, Willingham offers these suggestions:

First, remember why you’re investing.

“With the market decline, people will be tempted to change their investment strategies,” Willingham says. “But they need to keep in mind that most of their financial goals, such as a comfortable retirement, are long-term in nature – a lot longer-term than the shelf life of the coronavirus. If investors have established a long-term strategy that’s appropriate for their needs, they should stick with it, no matter what today’s headlines are.”