COVID-19 and Your Investments: Insights to Help You Navigate This Unprecedented Period and Stay on Track to Your Goals.

Right now, times are challenging—the COVID-19 outbreak was swift and most people have felt the impact. It’s natural to be concerned about how the virus could affect you, your loved ones, community, finances and more. We want to help relieve some of that stress by providing you sound, straightforward advice on COVID-19’s market and economic impact.

Lean on our extensive investing experience and let us be your guide through these volatile times. We’ve helped thousands of clients navigate bull and bear markets during our 40+ years in business. We can help you understand what is happening in markets now, what history suggests may happen going forward, and what that means for your investments.

Come back regularly to stay up to date. Or call us at 888-823-9566 to speak with a representative who can discuss your personal situation.

How will COVID-19 impact the markets and the economy?

When markets started falling in late February, we believe they were anticipating the economic disruption COVID-19 containment efforts would bring. Because stocks move in advance of the economy, the fast, far-reaching interruption to businesses forced markets to price in a far higher probability of economic contraction than anyone thought likely before.

Economic data released from late March on have confirmed the now-widely expected GDP declines and unprecedented unemployment resulting from temporary business closures and other shutdown measures around the world.

In May, multiple countries—the US, UK, Germany, Spain, Italy and more—began gradually reopening. Plans are of course subject to change, so when and how restrictions fully ease remain to be seen, but in our view, economies safely re-opening and remaining open should be a positive for stocks.

We do believe the economy will eventually recover, and for investors, it’s critical to know stocks usually rebound before recessions end. Although it’s too early to tell whether the bear market already hit its low, stocks have generally risen since late March. In spite of this, we’ve seen widespread pessimism. This is normal as markets rise. Pessimism and skepticism continued for many years after the 2008 bear market ended—well after stocks surpassed their previous 2007 high. Fortunately, stocks don’t need widespread optimism to rise. In fact, pessimism can lower the bar for news that creates positive surprise.

Visit our MarketMinder page to stay on top of COVID-19 market and economic updates.

Can "stimulus" save the economy?

Global governments and central banks have announced “stimulus” efforts to blunt the virus’s economic impact. Stimulus efforts can help soften the blow during crises, but they are never a cure-all. While these efforts may present silver linings—especially for negatively affected individuals and small businesses—we don’t expect them to be the cause of the economy’s or market’s eventual turnaround.

So far, the Bank of Japan and the European Central Bank expanded their asset-purchasing programs, also known as quantitative easing (QE). The Bank of England restarted QE and drastically reduced interest rates. The Fed did the same, then enacted further unprecedented measures to try to support the financial system. And we’ve seen sweeping fiscal stimulus from the US, UK, Germany, France, Canada and elsewhere.

In our view, these efforts are a mixed bag. They may prove beneficial in the short term—especially as cash-starved small businesses like restaurants, shops, daycares and more try to recover. But other QE efforts may create unintended negatives, such as making banks less eager to lend.

Fiscal stimulus could help jumpstart demand in a longer recession and provide a tailwind during the recovery, but the immediate impact is likely limited. Fiscal policy takes time to implement and work through the economy.

See our latest insights on global stimulus efforts here.

When will the bear market end?

We don’t know, and we don’t believe anyone else can tell you either. This bear market’s duration depends on how long COVID-19 lingers and how long governments, people and businesses limit economic activity. We can tell you that though the beginning of this bear market was unique, investors’ reactions to it are not.

This suggests the eventual recovery will follow a typical pattern. Bear markets end after investors’ expectations become so bleak they depress stock prices to irrationally low levels. From there, any small positive can send stocks surging into the “V”-shaped recovery of a new bull market.

For more data and details on the current bear market and how it may end, download our Stock Market Outlook.

What does this mean for my investments?

We’ve long believed the riskiest thing investors can do is miss the market up days they need to achieve their long-term goals and objectives. That’s true today, too. Though we can’t be sure how long the volatility will last, at best, changing your investing strategy now will likely lock in losses and, at worst, derail you from the investment goals you’ve been saving for.

Our recommendation: Stay the course and focus on your long-term investment goals. Remember, stocks’ historical long-term returns of about 10% include all bear markets.[i] Being patient and staying in the market now will help ensure you are able to benefit when the next bull market begins.

We know this won’t be easy, and we want to be a resource for you. Contact us—we’d be happy to help you stay on track.

How is Fisher Investments supporting investors during COVID-19?

During these volatile times, it is more important than ever that we maintain our excellent level of service. As always, Fisher Investments delivers proactive and heightened communications. As the COVID-19 situation evolves, clients hear regularly from their dedicated Investment Counselors, who keep them up-to-date on portfolios and our strategy. We’ve also expanded our digital events this year, offering over 100 conferences and webinars, in which clients have been able to interact virtually with senior members of the firm.

Further, we help investors cut through the media noise by providing straightforward, fact-based information on market volatility and COVID-19 across our many digital platforms. Beyond this page, our daily blog, MarketMinder has been addressing COVID-19’s impact to stock markets since January. We also regularly write articles for reputable publications, like Reuters Plus and GuruFocus, and offer multimedia updates through social media: YouTube, Facebook, LinkedIn, and Twitter.

How can Fisher Investments help me?

The coronavirus’ toll on human lives and communities has been tragic, and the resulting financial strain on people and markets hasn’t made it any easier. Many investors feel like they’ve been thrown off course in their efforts to reach their financial goals.

We’ve been through bear markets and pandemics before, and we’re here to help now. Contact us online or by calling 888-823-9566. We’d be happy to share our perspective to help get you back on course during these volatile times.

Additional resources

Stock Market Outlook

Download our latest Stock Market Outlook for a fresh, level-headed perspective on where we think markets are headed and why.

Read Now

VIDEO: The Coronavirus and Market Volatility

In this 8-minute video, we discuss how COVID-19 relates to recent volatility and what it may mean for your portfolio.

Watch Now

VIDEO: April 2020 Market Update

Senior Vice President of Research Aaron Anderson shares Fisher Investments’ views on economic impact of COVID-19.

Watch Now

PODCAST: CARES Act Impacts for Individuals and Small Business Owners

Listen to our Market Insights Podcast and learn what the CARES Act provides in response to COVID-19’s economic disruption.

Listen Now

[i] Source: FactSet, Global Financial Data, Inc., as of 03/27/2020. Annual S&P 500 Index total returns, 12/31/1925 – 12/31/2019. Average annualized return of 10.1%.

Investing in securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations.