Abstract
COVID‐19 was a shock to financial markets. On March 23, 2020 the S&P 500 index had fallen by over 31% from its closing value on the first trading day of the year and the NASDAQ index fell nearly 25%. Volatility increased. The CBOE VIX Index and trading volume spiked in March and remained elevated. But by mid‐November, the S&P 500 index was above its beginning of the year value by 10% and the NASDAQ index was 30% above. During large market declines, history tells us that investors can be rewarded if they buy, while withstanding the urge to sell. Surveys of investors, as well as those who provide investment advice, suggest that these history lessons were known and those who followed them, were well‐served. However, the COVID‐19 pandemic reinforces these lessons for investors and their advisors when encountering the next large market decline.
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