Whether you are sitting in front of your TV or scrolling through your phone, you might agree that uncertainty seems to rule the day right now. Monday, March 9th marked the beginning of the stock market crash of 2020 – with history’s largest point plunge in the Dow Jones to date. That day was followed by two more huge drops on March 12th and 16th, and so far, we’ve seen the three worst single-day point drops in U.S. history. Over just a weeks’ time, the markets have dropped anywhere from 25 to 30%. You might be asking yourself, “Should I stay, or should I go?” Well, you’re not alone.

No one can tell where the markets will go from here. It’s likely that if you asked five different people, you would get five different responses. So, as you decide what you are going to do, here are a few factors to consider.

  1. The speed with which the market has dropped
    1. It only took the S&P 500 22 trading days to fall 30%, making it the fastest drop of this magnitude in history
    2. The second, third, and forth largest drops happened during the Great Depression era
  2. The potential for the market to drop even further
    1. The Great Depression era saw an 89% drop overall and with the virus figures still growing, there is the potential for greater losses still.
  3. The skyrocketing unemployment numbers we continue to hear
    1. The unemployment claims in a single week ending march 21st were five times higher than the previous record
    2. One group of economists has a projection of 47 million Americans (that’s over 32% unemployment!)
  4. The overall impact the pandemic is having on several key industries and the economy overall
    1. The retail industry, travel industry, and hospitality industries are losing massive amounts of business
    2. Estimates suggest the coronavirus could cost the global economy over $2.7 Trillion!
  5. The rate at which the virus continues to spread
    1. The U.S. now has the highest number of known of COVID-19 cases in the world, surpassing China and Italy.
    2. The death toll in America from COVID-19 is projected to surpass that of recent SARS and H1N1 outbreaks

As you can see, the only thing that is relatively certain right now is…uncertainty.

As you decide what to going forward, we hope you consider the principles of retirement and the impact they can have on preserving and protecting your retirement, while reducing risk, minimizing taxes, and helping provide a written plan. These principles are:

  1. Principle of income – draw income only from sources that go up
  2. Principle of diversification – use the investment triangle to diversify with purpose
  3. Principle of planning – use a written plan to map out income, anything less is just guessing

Click here if you want to learn more about these principles and how we are helping our clients stay positive year-to-date*.

 

*As of this article’s publication date.