FILE – A Toronto Stock Exchange ticker is seen at The Exchange Tower in Toronto on Thursday, August 18 2011. THE CANADIAN PRESS/Aaron Vincent Elkaim

Think before you buy or sell stocks amid COVID-19 market turmoil, B.C. professor urges

The stock market plunged and shot back up within 48 hours

Despite the drop in stock market prices Monday, one B.C. economist is saying this isn’t the time to go all-in.

Andrey Pavlov, a finance professor at Simon Fraser University, said although COVID-19 has had a marked effect on world markets, it won’t last long.

“Clearly, one way or another we’re going to get a handle on that virus,” Pavlov said.

“The world economy was doing quite well before the virus and I expect whatever factors were playing into that will kick in again after.”

Stocks went into a steep slide Monday on Wall Street as a combination of coronavirus fears and a crash in oil prices spread alarm through the market, triggering the first automatic halt in trading in over two decades to let investors catch their breath. The Toronto Stock Exchange posted its biggest one-day loss since 1987, although it surged 400 points in early trading Tuesday.

The novel coronavirus, or COVID-19, has infected more than 80 people across Canada and killed one care home resident in B.C. Worldwide, there have been more than 100,000 COVID-19 cases, the majority of them in China, where the outbreak began.

VIDEO: B.C. records first COVID-19 death in Canada as province hits 32 cases

The drops spurred worries among people invested in the stock market, but Pavlov said the advice remains the same this time around as it does for any market plunge: wait it out.

“You do not sell when the market is down, like right now, [because] markets stand to recover,” Pavlov said.

He said most people invested in the stock market have at least a few years before they will need that money, while people staring down retirement should not be so heavily invested to begin with because they don’t have time to wait out fluctuations.

And it’s not all bad news for the market.

“Bonds have done incredibly well, so a balanced portfolio that is designed to serve you for the longterm… you will experience losses, but they won’t be too bad,” Pavlov said.

“If you hold on to it, things will very likely improve.”

But if people sell in a panic, Pavlov noted, that’s what will do longterm harm to the market worldwide.

But while right now is not a bad time to buy, people relying on a payoff from buying more than they can afford right now could hurt both themselves, and the world’s general financial situation.

“That is the kind of thing that can transform a relatively short term problem into something that can last for years,” Pavlov said, if people take out loans or mortgages counting on low interest rates or an upcoming boom in the stock market.

READ MORE: Stocks slide on Wall Street over coronavirus and oil crash

READ MORE: North American stock markets surge higher in early trading after crash on Monday

– With files from The Canadian Press


@katslepian

katya.slepian@bpdigital.ca

Like us on Facebook and follow us on Twitter.

Coronaviruseconomy

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

QUINN’S QUIPS: A poignant farewell to Pot Luck Ceramics

As of Sept. 30 Pot Luck is closing its doors, a victim of COVID-19.

ARTS AROUND: Art exhibit showcases the new and retrospective

Celtic Chaos fundraising performance has been cancelled

LOOK BACK: The men who built the first Stamp Falls fish ladder

Delve into Alberni Valley history with the Alberni Valley Museum online

B.C. salmon farms challenge activists’ demands for site closures

News reporting also unfair, inaccurate and distorted

B.C. starts October with 82 more positive COVID-19 tests

10,899 tests a record for a single day, Bonnie Henry says

Missing mushroom picker in northern B.C. found dead

Witset elder found deceased in Price Creek area more than two weeks after he vanished

BC Greens focus on long-term care reform in first platform promise

Greens have promised to move away from the for-profit care home model

‘It’s a nightmare’: Northern B.C. family desperate after living in hotel for a year

Renae Podgorney says because of a lack of rentals, she’s now applying to rent a one-bedroom unit

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Costs climb to more than $100K for BC SPCA to care for animals in B.C. farm seizure

Eight puppies, of the 97 animals seized have now died from parvovirus enteritis

B.C. VOTES 2020: Wilkinson to stop 24-hour camping in city parks

Ban on ‘unsafe roadside panhandling’ to be enforced

Be prepared and drive safely, say BC RCMP as winter draws closer

Police provide list of ways to stay safe while driving in winter conditions

Most Read