We know with all the COVID-19 worry, markets have been extremely volatile over the past few weeks.
Not only do you have to worry about staying healthy but also worry about your investment balances. We are here to tell you that volatility is normal and it is important to remember that these are just temporary losses. Once business operations and consumer activity normalize, so will the markets. Our portfolio managers expect that the impact on U.S. growth will be short-lived, lasting for about two quarters before we start to see some recovery in the markets. As you can see in the figures below, provided by City National Rochdale, short term volatility is normal and every year has had a point where the market is down.
In the past 40 years, only 8 years ended in a decline. Below you can see how other viral outbreaks affected the markets, how long it lasted and how 3 months later, we were already seeing positive returns.
Source: FactSet as of January 2020.