(WTNH) — The economic impact of the coronavirus is spreading, and fears of a possible pandemic are rattling global markets. Is it contaminating your retirement? We are stretching your dollar with how the coronavirus may be impacting your 401K and other retirement investments.
Chris Burns, the CEO of DynamicMoney.com, says, “I think everyone is uncomfortable…The market is more like my 4-year-old than it is like a college professor. It’s not some logical entity.”
Investors are concerned the virus will negatively impact consumer demand and disrupt manufacturing supply chains in major industries. So far this trading week, the Dow Index has lost more than 2,000 total points.
Burns said, “It’s a big drop. So what the normal person does then is say ‘I want control and so therefore I’ll sell off… I’ll go ahead and go to safety,’ and that could be one of the most damaging things for your portfolio.”
So, is your nest egg safe? Experts say, historically, markets have rebounded from previous outbreaks, and that this is just a short-lived blip in the market.
But people close to retirement, who have been more aggressive than they otherwise would be, should be the most vigilant.
“I’m worried the most about those people,” Burns said, “Because if we see a significant drop and they haven’t adjusted their portfolio to be realistic as they move to retirement. That could be really damaging for them.”
For the rest of us, experts say ‘don’t panic,’ and continue to add to you 401K and investing on the stock market.
“Now might be the time you need to adjust and go ‘I’m gonna take this seriously.’ So, whether it’s this specific situation that causes us to go into a recession or it’s something months from now… that I’m actually ready. My portfolio is ready for that kind of drop,” Burns said.