BY MARCO SANTANA
ORLANDO – Financial planners are telling clients to stay the course in the stock market, even as coronavirus fears have plunged Dow Jones and other markets to historic losses.
In fact, some say buying might be a smart move right now because the markets tend to rebound from catastrophic events, with the Sept. 11, 2001, terror attacks and the 2008 economic crisis serving as examples.
“There is a giant ripple effect …. That is the hardest part,” said Marisa Bradbury of Sigma Investment Counselors. “Many are just worried about how to pay next month’s bills. But if you do have money invested and you are maintaining a long-term outlook, you have to ride it out and hang on.”
Market in tailspin
Financial planners from across Central Florida say clients have been calling in a panic as the markets tumble.
The Dow Jones Industrial Average closed Feb. 12 at an all-time high of 29,551.42.
However, since then, fears that a coronavirus pandemic was on the horizon and how President Donald Trump has reacted have sent the market into a tailspin, plunging 32% from its peak by the end of last week.
“But longtime investors seem to have learned lessons from past financial crises,” said Dennis Nolte of Seacoast Investment Services in Winter Park.
“It’s very different now because people are calling me, including a 74-year-old retired schoolteacher, asking when the right time is to buy Amazon and Apple,” he said. “They are in much better shape than they were in 2009.”
An uncomfortable time
Still, the advisers conceded that some of their clients are extremely concerned, to put it mildly.
Their general advice? Don’t panic.
“These moments show you whether you’re an investor or speculator,” said Mike Salmon of Moisand Fitzgerald and Tamayo in Orlando. “It feels uncomfortable looking at account values drop, but money you have invested should always be for the long term.”
The Federal Reserve and Congress have been trying to calm the markets by slashing interest rates and promising a stimulus plan that will send checks to consumers.
“That’s how volatile things are right now, and that’s a bad sign,” Nolte said. “The market is not responding the way the government would like it to respond. It will get worse before it gets better.”
Stick to long-term plan
Bradbury said small business owners unsure of future income and even doctors have been panicking, asking if they should withdraw.
A sharp spike in layoffs, which many economic experts expect to materialize in the coming weeks, would add to those worries.
“The ones I’m concerned about are the paycheck-to-paycheck people,” she said. “We haven’t seen layoffs and the impact of people’s job getting cut just yet.
“You have to stick to your long-term plan, even in times like this,” Bradbury said. “The market is back to where it was (in 2017). This could also be a buying opportunity. If you think you’ll just re-buy when it feels better, it might hurt more to miss out.”
As businesses continue to get rocked by coronavirus, with hotel closures becoming just the latest previously unimaginable developments, it’s been tougher to convince investors to stay optimistic.
But Salmon said Central Florida is a tourism hotspot that will rebound, even if it’s uncertain when that will happen.
“This is a temporary event,” he said. “A discretionary recreational spending budget isn’t really possible. I feel the worst for everyone in hospitality and tourism.”
“I don’t know who will survive at the end of this. It’ll be painful for business owners and restaurants and bars, but I can’t imagine that everyone will decide to never travel after this.”