HAVING A SIGNIFICANT IMPACT NOT ONLY ON OUR TOP PROCESS BUT ON GLOBAL MARKETS.
EMILY: BRAD WRIGHT JOINS US FROM THE NEWSROOM.
THE DIRECTOR OF FINANCIAL PLANNING AND NEW ENGLAND FINANCIAL PLANNING GROUP.
BRAD, I THINK THE BIG QUESTION IS, SHOULD WE BE CONCERNED ABOUT THIS?
BRAD: THAT IS THE BIG QUESTION.
THE WAY WE LOOK AT IT THERE’S ALWAYS SOMETHING, THE THREAT OF A SLOWDOWN IN THE ECONOMY, WHETHER IT IS A TWEET OR IN THIS CASE WHETHER IT IS THE CORONAVIRUS WHICH IS A SERIOUS
HEALTH ISSUE.
SHOULD YOU PANIC AT THIS POINT?
NO, ABSOLUTELY NOT.
FROM OUR VIEWPOINT, YOU SHOULD BE INVESTED FOR THE LONG-TERM AS OPPOSED TO DAY-TO-DAY TRADING.
IF YOU’VE DONE THA PROPERLYT AND ASSESS YOUR RISK AND YOU ARE INVESTED ACCORDING TO YOUR RISK TOLERANCE, YOU SHOULD BE ABLE TO WEATHER A DAY OR TWO OR EVEN THREE.
ED: WHAT DOES THIS MEAN FOR THE AVERAGE 401K?
BRAD: IT MAY BE GOOD NEWS IF YOU HAVE A 401K, BECAUSE YOU ARE TYPICALLY INVESTING EVERY PAY PERIOD.
IF YOU INVESTED TODAY, YOU GOT A BARGAIN, YOU BOUGHT LOW AND EN DE UP GETTING MORE SHARES.
AS THE MARKET RISES YOU END UP MAKING MORE MONEY THAT WAY.
EMILY: SO, IF PEOPLE ARE GETTING BARGAINS NOW, DO YOU SEE THIS CONTINUING?
IF MORE CASES APPEAR, COULD THIS BE TROUBLE IN THE LONG RUN?
BRAD: TWO THINGS.
COULD IT CONTINUE?
YES, THEY COULD CONTINUE.
WE LIKE TO THINK WE CAN FORECAST WHAT IS GOING TO HAPPEN.
THE ECONOMY IS GOOD, UNEMPLOYMENT IS LOW.
THINGS LIKE THAT ARE POSITIVE AND THEN SOMETHING LIKE THIS SHOWS UP OUT OF THE BLUE AND THROWS EVERYTHING OFF KILTER.
COULD IT CONTINUE?
YES.
BUT KEEP IN MIND IT WAS A BIG DROP TODAY BUT WE CAME DOWN FROM A REALLY HIGH HIGH.
WE WERE AT RECORD HIGHS IN THE PAST COUPLE WEEKS.
WE’RE DOWN NO, YOU KNOW, I’M NOT TOO CONCERNED.
ED: 1000 POINTS, THAT GETS PEOPLE’S ATTENTION TOBRAD: IT DOES.
THINGS YOU CAN DO, YOU CAN LOOK TO PUT MORE IN AT THIS POINT, YOU CAN LOOK AT SOMETHING LIKE HARVESTING THE LOSSES, WHICH MEANS SELL AT A LOW, WHICH WILL OFFSET YOUR GAINS LATER ON IN
THE YEAR, TOO.
SOMETHING PEOPLE DO NOT UNDERSTAND IS THAT TYPICALLY THE MAJORITY OF TIMES WHERE THE YEAR ENDS UP POSITIVE.
DECEMBER 31 YOU LOOK BACK ON A POSITIVE YEAR.
AT SOME POINT DURING THE YEAR THE MARKET WHEN NEGATIVE.
YOU DIDN'