I’ve been struggling with how to write about the growing Coronavirus outbreak. In the early days there was a lot of unclear information and I didn’t want to write something that was totally wrong. As the number of reported cases have grown and the virus has spread to places like Iran, Italy, and South Korea, I’ve learned more and found some very reliable sources of information. Then, today, I read the exact post I wanted to write but couldn’t for some reason.

 

This post by Cullen Roche on his Pragmatic Capitalism blog was just perfect. You should take the time to read it, but remember, we can prepare for all kinds of risks in your portfolio but it’s the unknown-unknowns that are the impossible risks to plan for. No one had a global pandemic as part of their expectations for 2020.

 

If you are constantly worried about the impact of Covid-19 on your investment portfolio then the discussion you SHOULD be having is about your asset mix. Being able to enjoy the double-digit return years requires you to be comfortable with the potential for double-digit down years as well. If you aren’t comfortable after a 7% drop in a week then you won’t be able to stick with your mix when things get rougher. And they just might get rougher from here.

 

An aside, please take COVID-19/Coronavirus seriously for your personal health. It’s highly contagious and it appears that it can be spread by asymptomatic people which is unusual for other coronavirus strains. Your personal health is the most important factor in your financial success so guard it with care.