The effects of coronavirus are impacting industries and businesses nationwide, leading to a turbulent stock market. But experts are advising people not to panic.
As travelers cancel trips to prevent exposure to the disease, stocks for airlines and cruise ship companies are taking a big hit. Heightening social distancing measures are also indirectly throwing a wrench into the energy sector with perceptions of a collapse in demand causing energy prices to drop.
Michael Joyce is president of Agili, a Richmond-based firm that helps people manage their money and investments.
“That's not good for energy producers,” Joyce said. “I would argue that it's good for our consumers and good for the economy because if they're spending less money on gas or, if Amazon is spending less money to deliver things that people order to their houses, I think that's going to be a positive [for] the economy.”
Joyce said people should look at how their investments will fare in the long-term, and avoid selling stocks simply because they’re down.
“The roller coaster that we've seen will continue, but ultimately this will inevitably pass,” Joyce said. “Everybody's being impacted. But I think a key there is, are they suffering from permanent losses?”
What would constitute a permanent loss is if a company goes bankrupt, or if an investor were to sell a stock while it’s down and miss out on the recovery when it starts trending upward.
On Sunday, the Federal Reserve dropped its benchmark interest rate from .25% to 0% in response to the coronavirus epidemic. It said the move is in an effort to support economic activity, strong labor market conditions and to get inflation back up to the recommended 2%.
