While news about the Coronavirus may seem unsettling and somewhat frightening, it is not the end of the world. Outbreaks like this have happened before and will happen again, they usually last a few months. To provide some perspective, US influenza in 2018-2019 season resulted in roughly 34,000 deaths and in 2017-2018 there were 61,000 associated deaths.* Even with those statistics, the market hit new highs. We don’t want to make light of over 200 deaths in China, but as a percentage, it is infinitely smaller than the US. Do we think it will definitely cause a slow-down, yes, as many business are temporarily shutting down.
Our perspective: the far east will suffer the most from this event in the short term which in turn will cause a less robust GDP growth for the countries most affected by the outbreak. While this is still developing, there is no reason to panic as China is attempting to control the outbreak. If it is prolonged, the GDP will suffer a bit more; if short term, the economic impact will be minimal. As with everything else in life, this too shall pass. With that being said, if our markets take a downturn from this event, it will only serve as a nice buying opportunity in the equity markets.
As always, please feel free to call Granite Group Advisors at 203-210-7814.
*Data from CDC site.
Granite Group Advisors is a private investment advocate for families, foundations and pensions. We are also a 3(38) Investment Fiduciary providing managed models with investment education to make retirement plans simple.