During global pandemics or worldwide healthcare concerns, experts often turn to the stock market to watch how investors and business respond to fears. Recently, financial advisors have been paying close attention to the effect COVID-19, also known as Coronoavirus, has had on financial markets.

The Federal Open Market Committee voted unanimously to lower the target range for the federal funds rate by 50 basis points, to 1.00-1.50%, effective March 4 – two weeks ahead of the scheduled policy meeting (March 17-18).

FOMC Chairman Powell recognized that “a rate cut will not reduce the rate of infection, it won’t fix a broken supply chain.” However, “it will support accommodative financial conditions and will help boost household and business confidence.”

Volatility is likely to continue in the markets for the next few weeks with the increasing chance of a notable widespread outbreak of the COVID-19 virus in the U.S. We have passed some events, such as the first U.S. death and community spread, that Struble and Company Financial Advisors thought would trigger market reaction. Some additional events that they are watching for include: 100+ cases in the U.S.; community transmission in a major city; additional deaths showing a higher than 2% death rate; hospitals reaching capacity; schools closing; and federal government urging telework for its employees.

Each of these could trigger additional volatility.

A sudden market drop can be a frightening event for many investors. Fortunately, Struble and Company Financial Advisors can help you maintain your focus in the midst of market mayhem and avoid making hasty decisions that could derail your long-term plans.

Taking advantage of buying opportunities when the market is down has historically proven to be an effective strategy for building long-term wealth. Consider the following scenarios, each a different investment approach during the 2008-2009 market downturn.

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Scenarios reflect investment actions taken March 10, 2009. Past performance is no guarantee of future results. *Source: Morningstar. The S&P 500 Index indicates stock market performance and does not represent the performance of any particular investment. Indices are unmanaged and their returns assume reinvestment of dividends and do not reflect any fees or expenses that may be associated with an investment. It is not possible to invest directly in an index. CD rates are represented by Citi Certificate of Deposit 6 Mon USD. CD principal and rates are fixed. State and federal agencies insure the principal up to certain limits. The chart, prepared by Struble and Company Financial Life Planners, is for illustrative purposes only and does not represent the performance of any investment. **Systematic investing does not assure a profit or protect against loss. You should consider your ability to invest during periods of low-price levels.

During this time of volatility, it is also important to remember there are a lot of “get rich quick” schemes attempting to prey upon emotional investors to leave their long-term plan. Do not allow fear to govern your investment decisions in a market downturn, and turn to Struble and Company Financial Advisors as your first point of contact to discuss your options to create a financial life plan.

Struble and Company Financial Advisors can be contacted at 931-410-3030.