75ºF

Hold onto your 401k, experts say coronavirus impact is ‘short term’

Promise of financial stimulus offers temporary relief to global markets

ALTAMONTE SPRINGS, Fla. – Don’t panic: It’s Tuesday and the markets are buying and selling again.

The DOW surged back more than 800 points at the open Tuesday in response to the Trump administration’s call for payroll cuts and other economic strategies.

Although specifics won’t be clear until a 5:30 p.m. EST news conference the notion that consumers will get additional financial stimulus provided some relief on the global markets.

U.S. Secretary of the Treasury Stephen Mnuchin indicated the White House was ready to make financial moves to shore up the economy.

“The President is committed that whatever support we need to provide to the US economy, we will use all our tools, working very closely with the regulators," Mnuchin said. "The President has the bank CEOs coming in this week, we’ll be talking to them about what they can do to help small businesses and companies that are impacted.”

Certified Financial Group in Altamonte Springs issued an analysis Tuesday predicting “continued market volatility as the uncertainty of transmission rates of the coronavirus dominated market movements.”

The investment strategy group stressed long term financial goals and returns rather than the impulsive selling that comes with short term volatility.

“While no one can guarantee past epidemic market performance will be comparable to the current virus, history has shown these 'events’ to be relatively short term in nature,” the statement read in part.

The market was at historic highs well over 2900 when the coronavirus hit the global stage, so there is room to lose and come back without an aftershock.

The 2008 recession would have created a much more difficult challenge.

The thing to remember is unemployment is at record levels, interest rates are at historic lows, inflation is calm and gas prices may hit $1.99 a gallon.

The Coronavirus creates continued uncertainty for airlines, concerts, hotel stays and cruises, all economic generators that depend on people showing up and spending money.

American Airlines just cut domestic and international flights. Music artists including Pearl Jam and Madonna have canceled shows amid Covid-19 fears.

Visit Clickorlando.com/coronavirus for more updates.


About the Author: