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Fidelity, Vanguard, T. Rowe Price to investors: 'Stay the course'

Ethan Wolff-Mann
Senior Writer

Fears of economic fallout from the coronavirus outbreak have scared the markets since Feb. 20. On Monday, the markets plunged even lower.

Individual investors have been getting worried, and Google Trends data shows people are  paying attention and seeking answers. 

To combat panic activity, many asset management websites are filled with messages designed to keep investors from doing something that may harm them down the line. 

Fidelity linked to a post called “Markets, emotions, and you,” pointing out that emotions can hinder success in the market and that the best thing to do is to make a plan that works in a wide array of scenarios — good and bad — and stick to it.

T. Rowe Price has a similar message, entitled “the case for staying invested through volatile markets.”

A graphic from Fidelity's website.

Vanguard led with a message from its CEO, a move that was made, the company told Yahoo Finance, because it’s hard for average investors to tune out the noise. 

All three said a version of the same thing: “stay the course.” 

A long-term message: even for those nearing retirement

Vanguard’s home page features a large splash page with a photo and message from CEO Tim Buckley citing three things “to remember during market volatility,” including standing by “our mantra — ‘stay the course.’”

Buckley notes that this is much easier when things are calm than when the market freefalls amid a global health scare that governments are still trying to get their arms around. But Buckley pointed out that many investors already have a strategy designed to deal with moments like these.

“We preach diversification so you can weather these tough times and stay invested,” he said.

Buckley said he’s seen 30 years of market storms with “sometimes violent” re-pricings. 

“Panic and rash action aren’t your ally,” he said. “Those who cash out find it impossible to know when to get back in. Indeed, investors that deviate from their long-term plans typically regret it later.”

Buckley and other financial experts tell long-term investors to make a plan when times are good. Even when the stock market had more bulls than Pamplona in July, no advisor would ever have recommended a portfolio with 100% stocks to someone close to retirement. A good plan always should factor in the possibility of a contracting economy as well as an expanding one.

The Vanguard CEO points this out. “An investment plan established during calmer times should not be abandoned in the midst of a market downturn,” he said. “Let the benefits of diversification play out.”

To wit, if your portfolio isn’t down, that probably means you’re not adequately diversified. These days, with people living longer, running out of money in old age because of a portfolio that’s too conservative is just as much of a risk as a portfolio getting slammed by a surprise market downturn.

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Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, personal finance, retail, airlines, and more. Follow him on Twitter @ewolffmann.

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