Despite the drop in stock market prices Monday, one B.C. economist is saying this isnB次元官网网址檛 the time to go all-in.
Andrey Pavlov, a finance professor at Simon Fraser University, said although COVID-19 has had a marked effect on world markets, it wonB次元官网网址檛 last long.
B次元官网网址淐learly, one way or another weB次元官网网址檙e going to get a handle on that virus,B次元官网网址� Pavlov said.
B次元官网网址淭he world economy was doing quite well before the virus and I expect whatever factors were playing into that will kick in again after.B次元官网网址�
Stocks went into a steep slide Monday on Wall Street as a combination of coronavirus fears and a crash in oil prices spread alarm through the market, triggering the first automatic halt in trading in over two decades to let investors catch their breath. The Toronto Stock Exchange posted its biggest one-day loss since 1987, although it surged 400 points in early trading Tuesday.
The novel coronavirus, or COVID-19, has infected more than 80 people across Canada and killed one care home resident in B.C. Worldwide, there have been more than 100,000 COVID-19 cases, the majority of them in China, where the outbreak began.
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The drops spurred worries among people invested in the stock market, but Pavlov said the advice remains the same this time around as it does for any market plunge: wait it out.
B次元官网网址淵ou do not sell when the market is down, like right now, [because] markets stand to recover,B次元官网网址� Pavlov said.
He said most people invested in the stock market have at least a few years before they will need that money, while people staring down retirement should not be so heavily invested to begin with because they donB次元官网网址檛 have time to wait out fluctuations.
And itB次元官网网址檚 not all bad news for the market.
B次元官网网址淏onds have done incredibly well, so a balanced portfolio that is designed to serve you for the longtermB次元官网网址� you will experience losses, but they wonB次元官网网址檛 be too bad,B次元官网网址� Pavlov said.
B次元官网网址淚f you hold on to it, things will very likely improve.B次元官网网址�
But if people sell in a panic, Pavlov noted, thatB次元官网网址檚 what will do longterm harm to the market worldwide.
But while right now is not a bad time to buy, people relying on a payoff from buying more than they can afford right now could hurt both themselves, and the worldB次元官网网址檚 general financial situation.
B次元官网网址淭hat is the kind of thing that can transform a relatively short term problem into something that can last for years,B次元官网网址� Pavlov said, if people take out loans or mortgages counting on low interest rates or an upcoming boom in the stock market.
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B次元官网网址� With files from The Canadian Press
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