VIX at 72. Market in a panic. Last time this happened, Bear Stearns and Lehman Brothers gave up the ghost, and the Great Recession was underway.
Action to take: nothing.
Seriously, nothing. At least as it relates to the stock market itself. Wall Street isn’t Main Street.
Unless you’re a day trader, this information shouldn’t impact you. If you’re not within 5 years of retirement, COMPLETELY ignore the stock market. It’s noise at this point that’s creating more unease that you shouldn’t act on.
If you’re thinking about investing for the long term, I’d personally wait to invest until the number of cases peak in America, probably in about a couple of months. That’s when the risk should be priced in and we’ll have more visibility into the broader effects of the pandemic.
If you’re enrolled in a retirement plan like a 401K through your employer, don’t change it outside the annual rebalancing you should be doing anyway.
If you’re in business, yes, the recession is finally here. All the planning and discussing we’ve been having for over a year now can finally be put in play, so dust off that contingency binder and get cracking.
Stay home and wash your hands. Take care of yourself. And tune out the short term economic news.
Reminder: the VIX is the CBOE Volatility Index, an indicator of how volatile traders think the market is, how uncertain it is.
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