The coronavirus is causing a lot of disruption and uncertainty to our normal lives.
It's not the end of the world, but you shouldn't take it lightly either.
There's more to it than just washing your hands, though you should definitely wash your properly hands – imagine you've just been preparing chili peppers and now you need to put in contacts into your eyes – that's how well you need to wash!
These are some financial things you need to be thinking about:
Think long-term with your portfolio
Share prices are going to move up and down. It's what the share market does. Without risk there wouldn't be a good level of returns.
There are occasional periods like this where there are significant uncertainties, share prices fall heavily and economies go through a dip (or worse).
But don't forget, the world has been through plenty of major problems and come through the other side. We've had world wars, the 'Spanish' Flu, the depression in the 1930s, the GFC. We gotten through all of those. We'll get through this too. If you sell you've locked in the fall. Most shares will recover and go onto new heights in the future.
Companies like BHP Group Ltd (ASX: BHP), Wesfarmers Ltd (ASX: WES) and Westpac Banking Corp (ASX: WBC) have been around for a very long time and will continue operating, even if they suffer short-term pain.
As long as you're invested in businesses with good products and a strong balance sheet then your portfolio will be fine.
Emergency funds come into their own
I have been banging on about emergency funds for quite a long time. I wish all companies would also maintain a strong financial position so they could get through times like this and keep as many employees on as possible.
My suggestion for a long time has been that every adult try to have at least $1,000 on call for emergencies, preferably a few months' worth of living expenses. If you can.
Emergency funds are important when you need them most, particularly if you lose your income. If your emergency fund isn't quite as big as you want it to be then I'd work on increasing that over the next few weeks.
Be brave with your investing
When you look over the past two decades, the best buying opportunity with shares was probably during the GFC if you were able to take advantage of those lower prices.
It's very rare for the share market to fall by 30% or more over such a short period of time. We're only just about to reach one month since the share falls started.
You only achieve very strong investment returns if you invest at low prices, which requires a type of bravery and belief that the economy will get through the problems at some point. Hopefully sooner rather than later.
I've been investing in recent weeks. There are plenty of opportunities for investing out there and they could get even better.
