As the coronavirus continues its global spread, Canadians are worrying not only about their health but also about their retirement plans amid uncertainty about the disease’s economic impact.
As the coronavirus continues its global spread, Canadians are worried not only about their health but also about their retirement plans. Many people’s hard-earned investment portfolios have already taken a beating as stock markets plummeted this week over concerns of the virus’s impact on the economy.
“This is nuts,” said Jim Allen of Toronto, a 74-year-old retired IT consultant who relies on his investments for the majority of his income. Even so, he’s decided not to worry about the spiralling stock market
“Keep your head in the sand and hope it’ll go by,” said Allen about his current coping strategy. “I’m not going to panic and start selling things, because that’s when you do take a loss.”
Investment strategists would say Allen is smart not to panic.
“I don’t think worrying helps one make sound, logical decisions,” said financial planner Rona Birenbaum.
But is Allen making the right decision by holding onto his investments? Financial experts CBC News interviewed said that all depends on your immediate needs, your long-term plans and your ability to stomach volatile markets while the coronavirus continues to wreak havoc.
How long will this go on?
For people who hope to sit out the current economic crisis until their investments recover, the question remains: How long can you wait?
Birenbaum said that during the 2008 financial crisis, investors who sat on the sidelines waited about four years to recoup their losses. But she said they fared much better than people who panicked and sold their stocks at low prices during the downturn.
“The people that sold, they’ve probably still not recovered, quite frankly,” said Birenbaum, of the Toronto firm Caring for Clients.
Doug Porter, chief economist at Bank of Montreal, agrees that now isn’t the time to sta