36 NEWSWEEK.COM MARCH 27, 2020
STOCKSa neck-snapping, stomach-churning, headache-inducing few
weeks for savers and investors. The speed with which the mar-
ket went from a record-high close on February 12 to the worst
week for stocks since the Great Recession by the month’s end was
mind-numbing. In the ensuing days and weeks, investors have con-
tinued to veer wildly between extreme worry over the potential for
the coronavirus to tip the country and the world into recession
and cautious optimism that global leaders would come up with a
unified plan to slow the spread of disease and contain the fallout.
Even an emergency interest-rate cut from the Federal Reserve
in early March, two weeks ahead of its regularly scheduled meet-
ing, didn’t serve to reassure—and with good reason. Says David
Lebovitz, a global market strategist with J.P. Morgan Asset Man-
agement, “It’s just impossible for anyone to know whether the
worst is over or there’s more carnage to come.”
That uncertainty about what the future holds is deeply unset-
tling, not just for Wall Street money managers and people in the
1 percent but for regular folks too—people who are contributing
to 401(k)s and IRAs for retirement, socking away money for their
kids’ college education in 529 plans and building savings in in-
vestment accounts for other long-term goals.
“What makes this sell-off different is that it feels more personal,”
says Blair DuQuesnay, an investment adviser and certified finan-
cial planner with Ritholtz Wealth Management. “It involves fear
not just about your money but also fear about your health and
the health of people you love. That adds an extra layer of anxiety.”
If you’re among those worrying—and really, who isn’t worry-
ing?—there are smart steps you can and should be taking now
to keep your finances on track amid the very real threat of an
economic downturn. Here’s what you need to know.the market’s swift and dramatic
decline over the past month or so
may feel shocking, but it didn’t exact-
ly come as a surprise to the pros. After
11 years of stocks going mostly up-up-
up—this has been the longest bull mar-
ket in history—financial advisers have
been warning about the possibility of
a sharp drop. Says Lebovitz: “COVID-19
just proved to be the catalyst.”
As market routs go, in fact, this one
isn’t quite as bad as recent scary head-
lines suggest (at least, so far). That
record-breaking 1,294-point drop
in the Dow on February 27? In per-
centage terms, it was a far milder 4.4
percent sell-off, not even big enough
to crack the top 20 list of largest de-
clines on Wall Street and nowhere
close to the 22.6 percent “Black Mon-
day” crash of October 19, 1987, still
the single worst day in market history.
Account balances for most investors
are still solidly ahead of where they
were a year ago and way up over the
past decade: A $10,000 investment
in U.S. stocks in March 2010, as mea-
sured by the S&P 500 index, would be
worth well over $25,000 today.
Even if the sell-off continues, itGET
PERSPECTIVE1
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“Your investment portfolio is like a bar of soap.
The more you touch it, the SMALLER it will get.”