Oil is adding onto the coronavirus volatility with prices selling off in excess of 20% (largest since January 1991). Oil’s fall comes as a result to OPEC failing to strike a deal with its allies regarding production cuts. In reaction to the lack of a deal Saudi Arabia slashed prices, indicating that they would be looking to ramp up production and creating fear of an all-out price war that could ensue.
What’s more to watch out for today would be potential trading halts. These are often referred as “circuit breakers” for stocks that trip in order to help prevent indiscriminate sell-off events. Simply put, the markets want to give you time to catch your breath and consider if the selling is rational. You can see these triggers first at a 7% drop, this would cause a 15 minute halt in trading.
Most importantly, we stress here at Coastal Wealth Planners that diversification and a long-term approach help to provide some additional certainty. With proper diversification (in asset classes, market capitalization and sector/sub-sector) there can be some additional capital preservation as compared to more concentrated approaches.
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