SAN ANTONIO — The coronavirus pandemic is taking a toll on the economy. As businesses continue to remain at a standstill, the U.S. is facing a historic increase in unemployment. If the unknowns surrounding the economy’s future have you worried about what to do next with your stock market investments, here are some tips.
The coronavirus’ impact on the economy is evident in the increasing number of Americans who are filing for unemployment benefits. Just a few weeks ago, the U.S. Labor Department claims for benefits increased to the highest level in more than two years.
“I think we are already in a recession. I didn't think that we were prior to this. But when you literally cut off demand and nobody's purchasing anything, it doesn't take a long time for you to go into recession,” said Karl Eggers, senior wealth advisor and partner at Covenant. “It will get worse for a while. Obviously, a lot of this depends on the fiscal package that the government is putting together.”
Your initial gut reaction may be to sell your stocks but Eggerss said investors should not make sweeping changes.
“That is the natural human interaction. The time to do that, unfortunately, was a month ago when the markets were at an all-time high. Right now, what you have to do is if you're not a forced seller -- meaning you don't have to sell -- usually you get big moves to the upside and that's the time when cooler heads prevail where you can lighten up if you want to,” he said.
Depending on your circumstance and age, this could be an opportunity to benefit from the stock market.
“If you're younger, you should be taking advantage of these dips. If you're older and you're trying to protect principle, yes, you may need to reevaluate your plan but making wholesale changes is never a good idea,” said Eggerss.
He added that it will be an uphill battle for the U.S. economy to revive and to expect volatility in the market. For the majority of people, Eggerss said taking no action with your investments is the best strategy.