Skip to Content
Commentary

Our Responsibility to Help Manage the Impact of the Coronavirus

We don’t just owe it to ourselves to stay calm as we weather the storm. We owe it to one another.

Editor’s note: Read the latest on how the coronavirus is rattling the markets and what investors can do to navigate it.

OK, so things are a bit nutty out there. We all know that, and we all know basically what to do: evaluate our goals and our path toward those goals, thoughtfully and calmly

I recently listened in on a conversation with Morningstar’s equity analysts and investment researchers about the impact of the virus that causes COVID-19 on markets around the world. (Insider tip: It’s the same message and analysis shared with readers in our house view, because that’s how Morningstar works.) 

In addition to the thoughtful analysis, I was particularly impressed by the tone: calm, thoughtful, and action-oriented. It reminded me that moments like this are about more than our own financial picture. They are about who we are as a society and how we influence one another.

How We Respond to Coronavirus Matters
First and foremost, we need to remember that panic is a social phenomenon, whether it’s panicked selling of investments or panicked buying of sanitizer at Costco. Sure, there’s an underlying trigger, but our actions and our tone have the power to either turn that trigger into a crisis or into a blip that we quickly see in the rearview mirror. 

But we don’t think about that dynamic as much. It’s not what other people do in times like this that create problems; it’s what we do. There are noother people.” It’s true for the markets, and it’s also true for our mental health right now.

Managing the Impact of Coronavirus in Our Investments
Personally, as a contrarian investor, I try to identify buying opportunities when there’s a down market. But that isn’t all there is to it. 

Morningstar director of personal finance Christine Benz and others have talked about the value of rebalancing one’s portfolio now. That’s because, generally, when stocks are down and bonds are up, we maintain our asset allocation by selling high and buying low. 

This tactic also helps counter the crazy. By buying when others aren’t, we help limit the carnage, in our small way. And that helps real people avoid potentially dire situations. 

As many studies at Morningstar and beyond have shown, people lock in their losses by pulling out at the bottom of a down market. It’s not the stock market decline itself that hurts them per se; it’s that they exit and then miss out on the subsequent market upswing (which will happen, it’s just a matter of time). 

That’s a serious loss for retirees living off their investments or young families planning for their first house purchase. It means cutting back, living on less, and perhaps not even being able to pay the bills. 

Buying when others aren’t helps decrease the chance that people will panic and pull out, and it softens the blow if they later do. Keeping our heads and thoughtfully evaluating our investments means, ever so slightly, smoothing things out for everyone else. 

Managing the Impact of Coronavirus in Our Daily Lives
The impact we have is felt not just in our investing but also in our daily behavior. 

Last week, I talked with an old friend about my fears around the coronavirus. We fed off each other in our fear, and it just made things worse for both of us. And we spread that message of fear to others as well. 

We didn’t go out and buy face masks or such, but many others have. I know there’s already such a shortage of masks that nurses and doctors--the people who really need them--are running low. When I cause someone to become more panicked, I’m hurting my own doctors, my own family, and my own country. 

Instead, we can help carry the alternative message that Benz, healthcare strategist Karen Andersen, and many more at Morningstar and elsewhere are offering: a calm, thoughtful analysis of the facts. Perhaps then, things will turn out better, both in the markets and in all of our lives. 

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.