Local expert on Coronavirus-fueled market volatility

Warwick financial planner gives advice on protecting investments

WARWICK, R.I. (WLNE) — The Dow Jones Industrial Average has seen its two largest single-day point drops ever over the last few weeks, and last week the Federal Reserve lowered interest rates–all over Coronavirus fears.

“The motivation behind cutting interest rates is to tell consumers it’s okay to continue to spend money,” said Christina Gatteri, a certified financial planner at Innovative Planning Partners in Warwick. “Yet on the other side you tell yourself ‘but I’m not inclined to travel because there’s a health risk that a cut in interest rates is not going to stop.”

The market volatility has largely been caused by disruptions in the global supply market. Companies like Apple with large manufacturing operations in China, uncertain whether they’ll be able to fill orders. All of it has left investors understandably uneasy.

“The stock market was so good last year that any small scare is going to make people want to sell something to harvest the profits that they earned before it gets any worse,” said Gatteri.

I asked Gatteri whether you should avoid that temptation to sell, sell, sell.

“Maybe. That depends on your individual-it depends on your life. It depends on how nervous it makes you and it also depends on when you need the money,” said Gatteri.

Gatteri says as of now there is no evidence to suggest the current slump could lead to a recession, so don’t let it impact longer-term financial decisions.

“The stock markets eventually will recover. So if you’re worried about your 401k or retirement accounts, if you’re anything more than 10 years from retirement, then this is it’s breaking news but you’ve got some time to recover from it,” said Gatteri.

As for whether we’ve seen the worst of the financial impact already?

“I would love to say yes, but if the virus spreads worse than it already has within the United States, then that’s going to spark some emotional reactions. So I don’t know if that’s the worst of it. I hope it is,” said Gatteri.

Gatteri adds that if you’re investing money that you’re going to need in the short term, such as in the next couple of years, the stock market isn’t the best place to put that money in the first place.

NOTE: This story originally aired on Thursday, March 5. At that point, February 27 had been the largest single-day point drop for the Dow, but March 9 now holds that record. 

© WLNE-TV/ABC 6 2020

Categories: Coronavirus, News, Rhode Island