Investor Behavior During a Global Pandemic

On February 19, 2020, the S&P 500 reached a new all-time high (closing at over 3,386). From there, no one could have predicted the coronavirus or the impact it would have on our society.  Having received many questions during this time, I want to focus on three that are key for long-term successful investing.

What can history tell us about pandemics and the market’s reaction?

Although each crisis is unique, coronavirus does show some similarities to the Spanish flu of 1917-1918. Spanish flu infected 1 in 4 Americans and took the lives of approximately 1 in 150.  It also negatively impacted the stock market with a 40% down-turn, which then led to a 1 ½ year full recovery.  Although we do not have complete coronavirus data, to this point, it has infected less on a percentage basis and taken the lives of approximately 1 in 5,500.  In relation to the stock market, as it sits today (on 5/5/20), we have seen a 34% correction and a 19.43% recovery.

When might the financial markets recover?

Throughout American history, there have been 4 significant long-term bear (bad) markets. In every scenario (including The Great Recession and Depression), the market’s low to full recovery took no more than 4 ½ years. The bottom line… historically, stock market recoveries take a matter of months and years, rather than decades.  We do not know how long or severe this correction might be, but with the above information, a historical worst-case scenario would see recovery in a matter of years.

As an investor, how can I position myself for a full recovery?

Positioning a portfolio for full recovery takes proactivity, a goal-centered financial plan and following the rule of “buying low and selling high.”  Aligning financial goals to specific timeframes allows a portfolio to hold the appropriate mix of cash, bonds and stocks long before any volatility occurs.  If short-term goals exist within your financial plan, it is important to have safe cash and bonds that allow for both the downturn and withdrawals.  On the other hand, if all financial goals are long-term, it is important to allow stocks the space to recover during times of volatility.  In every decade of U.S history the stock market has experienced new all-time highs. Investors that know this and follow the above rule are more likely to have their portfolios recover and also participate in new market highs.

*This article was written by Michael J. Purifoy, CPA, CFP®, Executive Vice President, Southwestern Investment Group and Wealth Advisor, RJFS

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Jeffrey T. Dobyns


President, SageSpring | Financial Advisor, RJFS 

Jeffrey T. Dobyns

President, SageSpring | Financial Advisor, RJFS

Beyond crunching numbers and investment strategies, at SageSpring, we’re about building relationships. When you encounter Founder & President of SageSpring, Jeff Dobyns, it’s easy to understand why this is at the very heart of who we are as a firm. You won’t find stuffy formalities with Jeff; instead, you can expect to find him sharing a warm smile, communicating a compelling vision, or patiently untangling life’s complex challenges with clients. He believes in truly getting to know clients, understanding their aspirations and priorities, and navigating their financial plans with a tailored, comprehensive approach. Our team members have often been caught taking notes on Jeff’s effortless relationship skills from a distance, and we admire them for striving to learn from one of the best. 

Jeff’s financial expertise and wisdom are the perfect match to his innate people skills. Jeff holds the prestigious CERTIFIED FINANCIAL PLANNERTM certification, Chartered Life Underwriter (CLU®), and Chartered Financial Consultant (ChLU®) designations, and has held executive positions with financial planning firms for more than two decades. 

His dedication extends beyond the office to the boardroom and the local community, where Jeff is passionate about giving back. He serves as Chairman of the Board of Men of Valor, a prison ministry and mentoring program. Jeff also serves on the board of Send Musicians to Prison, which shares hope, healing and restoration with the imprisoned through musicians & artists. Jeff actively supports other initiatives in the community by sitting on the board of The Signatry of Middle Tennessee and the Halftime Institute of Nashville. 

Witnessing his four children, Gracyn, Hunter, Tanner, and Logan, excel on the field is almost just as rewarding, if not more, than celebrating the victories of seeing his clients overcome obstacles and build wealth. Spending weekends boating on the lake, hiking mountain trails, and fishing with his family are the moments Jeff cherishes most. It’s this grounded perspective that reveals the true meaning of wealth for Jeff: not just numbers on a page, but the freedom to create experiences that enrich your life and the lives of those you love. When you choose the Dobyns McMillin Wealth Team, you choose more than financial expertise. You choose a partner who champions your dreams, celebrates your victories, and walks besides you on the path to achieving your unique goals.

**Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER TM, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.