Don't panic, THINK!1 Mar 2020 22:39
YES, the market is overreacting:
President Donald Trump is reportedly very angry that the market has plunged, according to the Washington Post, and is angry at his staff.
“The Coronavirus is very much under control in the USA. We are in contact with everyone and all relevant countries. CDC & World Health have been working hard and very smart. Stock Market starting to look very good to me!” — Donald Trump 2/24
The market is probably cheap to long-term investors.
“The virus story is not going to last forever. To me, if you are an investor out there and you have a long-term point of view I would suggest very seriously taking a look at the market, the stock market, that is a lot cheaper than it was a week or two ago.” — Larry Kudlow, National Economic Council Director 2/25
Things will be fine later, so long-term investors are more stocks for their money.
“With this dip if it continues to go down, [long-term investors with 10+ years to retirement] should just stay the course and actually be quite happy because the market is still incredibly high.” — Suze Orman 2/26
A plunge like this almost always leads to positive gains six months later.
“We see this 3% drop as buyable.” — Tom Lee, Fundstrat 2/25
A V-bounce, where the market jumps back up after it falls down, is likely because people sold too much.
“S&P 500 has fallen 6 consecutive days with >8% fall. This happened 10 times since 1948. 10 of 10 times stocks higher 12 months later.” — Tom Lee, Fundstrat 2/28
Markets are overreacting — if we’re talking about long-term.
“There’s a lot of panic at the moment that’s not warranted. Short-term economic activity will contract and it will have an impact on global GDP, but it’s not like the world will end tomorrow.” — Allianz CEO Oliver Baete 2/26
Coronavirus is scary, but not a reason to sell for Warren Buffett.
“It is scary stuff. I don’t think it should affect what you do in stocks. If you look at the present situation, you get more for your money in stocks than bonds” — Warren Buffett 2/24
In the long run, things usually work out.
"While we are not trying to call the bottom of the market, past experience suggests this is a good time to invest in US stocks for investors with a time horizon of several months or more." — UBS Global Wealth Management CIO Mark Haefele 2/27
“Panic is not a winning investment strategy”
“Technological advances have led to 24/7 access to information, and one of the byproducts of this has been increased ‘short-termism’ among investors. This mindset is dangerous because it lacks discipline, in our view, something we have found typically beats those trying to time the market.” — BMO Capital Markets 2/27
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