Coronavirus (Covid-19) and Your Investments

School of Financial Wellness

How will coronavirus (covid-19) impact the markets?

Join us for our next event: Rollover and Play Dead. Does Your Estate Plan Really Work? with speaker Lynn Campisi, J.D., LL.M.

The webinar will be held on April 20th at 3:00 PM Central Time. There is no cost to attend, but you must register in advance.


Fear associated with the Novel Coronavirus, or COVID-19, has escalated in recent days, and many investors are getting anxious. This anxiety has materialized into a substantial drop in stock market indices over the past few trading sessions.

What should investors expect from markets during the global outbreak of COVID-19?

Michael Guilsher, Senior Financial Advisor at Meld Financial, recently took a deep look into this recent market action and compared it to previous global outbreaks. He’s made some interesting observations and we have detailed his analysis below.

Analysis by Michael Guilsher: Potential Impact of COVID-19 on Equity Markets Based on Date from Prior Outbreaks

The S&P 500 was down more than 7.5% over four trading days (2/20 – 2/25) and, after a strong start to 2020, is now down more than 3% for the year.

The coronavirus outbreak is only about two months old (early cases reported in December 2019 & the first death being reported in January 2020), so it is premature to discuss how this potential pandemic will play out. However, if history is any guide, it would suggest that we have some time before the coronavirus is fully contained, and we may be in for a bit more market volatility.

Since you are likely more concerned with your portfolio than contracting this virus, let’s look at how the S&P 500 was impacted by the last three major outbreaks; SARS in 2002-2003, H1N1 (or swine flu) in 2009-2010, and Ebola in 2013-2016:

  • While the length of the three previous outbreaks varied, all lasted at least one year and when all was said and done the US Equity market (S&P 500) managed to come out with double digit returns.
  • Volatility is to be expected, in each of the three events the S&P 500 experienced double-digit drawdowns at the trough but finished well in the black.

Please refer to the summary below, the complete data follows:

Outbreak Event S&P 500 max draw-down S&P 500 return for entire period
SARS -14.66% 10/31/02 – 7/31/03      +12.23%
H1N1 -12.02% 3/31/09 – 5/31/10       +37.54%
Ebola -14.35% 11/30/13 – 6/30/16    +15.73%

Historically, none of the previous epidemics led to a catastrophic market event and subsequently, the markets responded well following the initial volatility.

Equity Performance During Recent Health Pandemics Data – NASDAQ

Chart of Market Performance during recent health pandemics.
Source: NASDAQ Dorsey Wright

Your Situation Melded with Our Expertise

If you’re concerned about your portfolio, or if you are looking for guidance in navigating this tumultuous economic environment, don’t hesitate to contact a member of the Meld Financial team. Meld Financial employs a team of CFP’s®, financial analysts, legal professionals and tax specialists, so you can rest assured that we have the training and experience to manage your wealth effectively.

To stay up-to-date with market news and developments, be sure to bookmark our Weekly Economic Update and follow us on facebook, LinkedIn and Twitter.

Join Us for a Meld University Event

Meld Financial - Shred It - Event benefiting Children's Hospital of Alabama
Shred-It to benefit Children’s Hospital of Alabama

Bring your sensitive documents to be securely destroyed by Shred-It on site! Sponsored by Meld Financial for the benefit of Children’s of Alabama.

Preparing For Long Term Care Expenses in Retirement
Preparing for Long-Term Care Expenses in Retirement

Long-term care expenses represent a significant threat to your retirement outlook and can deplete a retirement nest egg quickly.

Financial Fingerprint™ by Meld Financial. Secure YOUR retirement plan.
Financial Fingerprint: How to Approach Your Retirement Questions

We are excited to introduce Financial Fingerprint™, our unique, retirement-focused planning process. Join us for this no-cost webinar to learn more!

Trending Articles

Wealth managers are key to your investment strategy.
5 Characteristics of a Quality Wealth Manager

School of Financial Wellness

Looking for a quality wealth manager? We pulled together our list of the 5 most important qualities to consider during your search.

Security Filing Strategies
What is Your Social Security Full Retirement Age and Why It Matters?

School of Social Security & Medicare

The Social Security defines Full Retirement Age (FRA) as the age at which you are entitled to receive your full Social Security benefits known as Primary Insurance Amount (PIA).

Social security medicare retirement text art word jumble
Special Social Security Filing Strategies

School of Social Security & Medicare

If you were born before January 2, 1954 you may be able to have your cake and eat it too regarding Social Security. In this article, we explore this special strategy.

Why Meld Financial?

Meld Financial, Inc. is an independent wealth management firm located in Birmingham, AL.

We specialize in financial planning, investment management, employee benefits and executive benefits for individuals, families, trusts, foundations and institutions.

We provide independent and objective services melded with customer-driven financial goals.

Mark McGarvey - Chairman - Meld Financial

“We will always recommend the same course of action we would choose for ourselves, given the same circumstances.”

-Mark McGarvey, Chairman