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Freaked Out by the Stock Market? Take a Deep Breath

Ignore predictions and seek perspective.

When the stock market falls, as it has all week, there is a natural desire to search for explanations and consult crystal balls. While the spread of the coronavirus has been a catalyst, nobody knows exactly why the market moved the way it did, including whether underlying economic troubles are contributing to the severity of the gyrations. And nobody call tell you how the virus will affect the United States, including whether the outbreak’s short-term economic impact will reduce long-term profits.

And you are a long-term investor, right?

Most of us fall into that category, if we are saving for retirement. We invest in stocks because doing so has consistently proved to be a good way to buy a little piece of capitalism. Hold on long enough to a diverse collection of stocks, and the system has tended to generously repay patient people over six or seven decades of working, saving and drawing down a portfolio.

Still, declines like the one investors experienced this week rarely feel good. And maybe you’re getting queasy about the economic implications of an outbreak that could force millions of Americans to shut themselves in for a while. If so, remind yourself of the following: Stocks are how your savings fight inflation, the market is not an absolute proxy for your personal finances, and you’re playing a long game — the very same points I raise every time we’ve worried about the stock market in recent years.

Isn’t it pretty? If you’ve been invested in the stock market for much of the past decade, all of that 180 percent-plus gain is yours on paper, even with a few rough days this week.

The Coronavirus Outbreak

  • Answers to your most common questions:

    Updated Feb. 26, 2020

    • What is a Coronavirus?
      It is a novel virus named for the crown-like spikes that protrude from its surface. The coronavirus can infect both animals and people, and can cause a range of respiratory illnesses from the common cold to more dangerous conditions like Severe Acute Respiratory Syndrome, or SARS.
    • How do I keep myself and others safe?
      Washing your hands frequently is the most important thing you can do, along with staying at home when you’re sick.
    • What if I’m traveling?
      The C.D.C. has warned older and at-risk travelers to avoid Japan, Italy and Iran. The agency also has advised against all non-essential travel to South Korea and China.
    • Where has the virus spread?
      The virus, which originated in Wuhan, China, has sickened more than 80,000 people in at least 33 countries, including Italy, Iran and South Korea.
    • How contagious is the virus?
      According to preliminary research, it seems moderately infectious, similar to SARS, and is probably transmitted through sneezes, coughs and contaminated surfaces. Scientists have estimated that each infected person could spread it to somewhere between 1.5 and 3.5 people without effective containment measures.
    • Who is working to contain the virus?
      The World Health Organization officials have been working with officials in China, where growth has slowed. But this week, as confirmed cases spiked on two continents, experts warned that the world is not ready for a major outbreak.