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

New Haislakala Language Revitalization Program aims to preserve and revitalize Haisla language

Haisla elders will be recorded speaking in Haislakala, with hopes of collecting 12,000-17,000 words.

“We’re not busting ghosts”: local paranormal investigators check out PF Bistro

Paranormal North Coast British Columbia recently checked out PF Bistro at City Centre Mall.

“Bears that test the limits”: Kitimat sees higher number of bears than average year

Bears aren’t necessarily more assertive this year, there’s just a higher number than average.

Search and Rescue and RCMP investigate after abandoned kayak found on Kitimat River

KSAR and Kitimat RCMP confirmed the owner lost the recently-discovered kayak a couple of weeks ago.

Provincial COVID-19 data can now be used for B.C. to prepare for a second wave

In the past week, B.C. has seen a slight spike in daily test-positive case counts

Study suggests 8 times more people in B.C. infected with virus than confirmed

The study looked at anonymous blood samples collected for reasons unrelated to COVID-19

Russian hackers seeking to steal COVID-19 vaccine data: intel agencies

It is believed APT29, also known as ‘the Dukes’ or ‘Cozy Bear’ was responsible

Twitter racing to unravel mystery cyberattack

Some of the world’s most prominent names had their Twitter accounts post invitations for an apparent Bitcoin scam

B.C. announces funding to support post-secondary students with disabilities

The province is investing $275,000 in the new BCcampus website

Tough time for tree fruits as some B.C. farm products soar

Province reports record 2019 sales, largely due to cannabis

Northern Indigenous cannabis cultivation facility to supply over 60 private B.C. stores

Construction to soon resume on Nations Cannabis in Burns Lake

‘Let’s all do a self-check’: Okanagan mayor reacts to racist vandalism targeting local family

Home of Indo-Canadian family in Summerland was targeted on evening of July 13

Province agrees to multimillion-dollar payout for alleged victims of Kelowna social worker

Robert Riley Saunders is accused of misappropriating funds of children — often Indigenous — in his care

B.C. businessman David Sidoo gets 3 months behind bars for college admissions scam

Sidoo was sentenced for hiring someone take the SATs in place of his two sons

Most Read