Protecting stocks amid COVID-19 fears

Coronavirus

NASHVILLE, Tenn. (WKRN) — COVID-19 fears have sent the global stock market plunging, and that uncertainty has left investors worried.

“The market is often dictated by emotions and the emotion that we’re seeing here is fear,” said Marc Adesso, a financial lawyer at Nashville Law Firm Waller. “It’s scary when your market portfolio loses a third of its value in the course of a week.”

Companies impacted include several in Middle Tennessee, including Nashville-based Smile Direct Club and Ryman Hospitality Group.

Most at risk, Adesso said, are retirees with wealth locked up in capital markets, IRAs, and 401Ks.

“The people who don’t have a cash source, that have a lot of their money invested in stock with very little liquidity are the ones that are going to be hurt right now,” he said.

Adesso shared his advice: “Don’t get sucked into the emotional trends, sucked into the fear trends,” he said.

Second- Don’t divest.

“Stay the course and just let the market get back to normal get back to health. You’re just going to be throwing money away by selling your securities now,” said Adesso. “It’s going to be harder to sell things off, and you’ll be selling things off at discount to what the true value of many the stocks probably are.”

But there is good news for people with extra cash on hand. Adesso said to look for opportunities to invest in stocks that are solid companies, regardless of market trends.

“As the quarantines and people can go back to normal life, I think the market will come back up,” he said. “What I don’t think is you’ll go back into a bull market. I think you’re going to go back into a collective environment that is more normalized and more indicative of actual values of companies.”

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