Only a few months ago, few of us had even heard of “novel coronavirus.” Today, it’s hard to avoid the latest news about it. Thankfully, U.S. citizens and markets alike have remained relatively immune so far. But still, you may be wondering whether you should try moving your investments out of markets that have been, or may be exposed to its economic impacts.
Our advice is simple, and grounded in experience gained from past, similar episodes: Do try to avoid this or any other health risk through good hygiene. But do not let the breaking news directly impact your investment stamina.
If you’re already following an evidence-based investment strategy …
• You’ve already got a globally diversified investment portfolio.
• It’s already structured to capture a measure of the market’s expected long-term returns.
• You’ve already accepted (at least in theory!) that tolerating a measure of this sort of risk is essential if you’d like to actually earn those expected long-term returns.
• You’ve already identified how much market risk you must expect to endure to achieve your personal financial goals; you have allocated your investments accordingly.