Clearly, Coronavirus has been front and center in the media lately, and worries about the spread of the disease are having an impact on markets. Remember, markets are discounting mechanisms. Prior to Coronavirus, global markets had priced into themselves, assumptions about global economic growth.
Now, markets are re-pricing the risk that previous growth assumptions may be negatively impacted by the Coronavirus. Ok, that’s reasonable. Sometimes, markets can be over zealous in the re-pricing of risk. Sometimes, it can assume an extinction level event. I don’t believe that we’re dealing with the latter.
Every day, we hear about the new cases that were diagnosed, and new deaths that have been reported. We’re not hearing much about people that have been treated, and who have recovered though. So, I did some digging, and have found many sources from CNN, to CNBC, The Hill, The Guardian, and the CDC on this topic. I would invite you to do the same.
Interestingly, as of today, “World O Meter” is reporting that we have a current total of 79,774 reported cases. The number of reported deaths stands at 2,629. However, what we’re not hearing on the nightly news is that 25,272 people infected with Coronavirus have recovered.
If you’ll follow the link below, you’ll be taken to a site where you can see the numbers and graph charts for yourself. Over 300,000 people died from the flu, globally, in 2019. The market seems to be over zealously re-pricing risk over something that has brought about 2,629 deaths, and feigning oblivion to the 25,272 recoveries.
This isn’t Ebola. Clearly, we had medicines to which the virus has responded. We didn’t have to develop a new wonder drug to treat a previously unknown disease.
Yes, its un-nerving to watch the market gyrate. Still, these are the times when intestinal fortitude is needed and context with regard to long term investment objectives is required. Stay informed, rise above the fray of panic, and make periods of time like this work for you.
David R. Guttery is a financial advisor, offering products and services using the following business names: Keystone Financial Group – insurance and financial services | Ameritas Investment Company, LLC (AIC), Member FINRA / SIPC – securities and investments | Ameritas Advisory Services (AAS) – investment advisory services. AIC and AAS are not affiliated with Keystone Financial Group.