Should You Be Worried About Your Retirement and the Coronavirus Stock Crash?
Coronavirus has been a daily topic on the news as the spread of the virus is carefully tracked throughout the world. Each new Coronavirus outbreak, quarantine, or fatality is broadcast on the news each day. The World Health Organization (WHO), world governments, and health care organizations around the world are combating the spread of the virus while they search for effective medications and vaccines.
However, the Coronavirus was in the news the week of February 24, 2020, for an entirely different reason. Fear of the global spread of the virus caused a financial panic, which impacted the world stock indexes.
Stock Markets Around the World Drop In Reaction to Coronavirus Fears
Many financial strategists were not worried about the impact a Coronavirus outbreak would have on the world’s stock indexes. However, that was several weeks ago. The week of February 24, 2020, was the worst week in more than a decade as stocks fells for the seventh consecutive day on Friday as the markets closed for the week.
The S&P 500 fell by 14 percent, while the Dow Jones fell by 12 percent. The DAX in Germany also fell by 12 percent, and the FTSE 100 in Britain fell by 11 percent. The Nikkei 225 in Japan fell by ten percent. Stock indexes in South Korea and Hong Kong also experienced decreases.
Investors, including retirement accounts, lost month as the stocks continued to fall during the week. The S&P 500 lost almost $3.4 trillion in market value during the weeklong downturn. The amount of money you might have lost in your retirement account depends on numerous factors, including your investment strategy and your administrator’s choice of stock portfolios for investments.
Why Did the Stock Market React to the Coronavirus?
There are several factors why the stock market reacted in a negative way to the news of the Coronavirus. Some financial experts and government officials claim that the stock market was due for a correction and fears of the Coronavirus was simply a catalyst for a correction that was overdue.
However, there are other reasons. Some major companies rely heavily on supply chains from around the world. Fear of losing those supply chains can result in negative impacts on the market. Cancellations of events and conferences also impact the market. Overall fear of a downturn in the financial outlook because of a potential Coronavirus pandemic.
Whether the downturn in the stock markets continues and we face a recession because of the Coronavirus remains to be seen.
What Should You Do to Protect Your Retirement Accounts?
Talk with your financial advisor if you are concerned about your retirement accounts during this recent downturn in the stock market. Investments in retirement accounts typically are designed for long-term investments. It is expected that there might be ups and downs in the market during that time. Therefore, this may be one of those downturns that you will ride out.
However, every person’s financial situation is unique. You may need to adjust your investment strategy to protect your money now and in the future. A financial planning professional can review the changes in the stock market with you in more detail and explain why you should or should not make any changes in your investment strategy at this point.
The one thing you do not want to do is panic and begin moving money without consulting with a financial professional. Panicking and moving money without all the facts could result in a higher loss of retirement income than is necessary.
Contact Castle Wealth Group to Discuss How to Handle Dips in the Stock Market
The financial professionals of Castle Wealth Group educate individuals regarding all aspects of financial planning, including retirement accounts, estate plans, Medicaid planning, tax planning, and investments. We can help you identify your goals and needs to develop a financial planning strategy that gives you the best chance of achieving those goals.
If you have questions about your retirement accounts or you are concerned with the recent losses in the stock markets, contact our office. Call (844) 885-4200 to speak with a knowledgeable representative. We are here to help you with all your financial planning decisions.
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