6 minute read
Finance/Children
Why is the coronavirus affecting financial markets?
Hi Taylor - I saw stocks take a big hit a week or two back and read that a lot of it was due to coronavirus Taylor fears. Do you Kovar know why an outbreak like this can affect the markets so much? - Charlene
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Hey Charlene - That’s a really good question. You see a lot of headlines about markets dropping because of coronavirus worries and concerns, but those headlines don’t explain the connection. If you dig deeper, you can find a handful of reasons why a health epidemic like this can have both an immediate and lasting impact on the economy.
Travel and tourism. Right out the gate, as soon as the first news broadcast aired reporting an outbreak in China, there was a small but noticeable hit felt by all the businesses in the area. In addition to restaurants and hotels shutting down due to quarantine, travel plans to all parts of China started taking detours. With the country’s size and population, that kind of shakeup causes a massive ripple effect for airlines and hotels around the world. Even if the coronavirus hadn’t been as big of a deal as it clearly is, global travel still would have been hurting for at least a few days as people cautiously canceled plans and figured out what was happening.
Supply chains. Trade with China is a big deal for most countries, due to both the geographic size and population of the country. When a health issue like this comes into play, supply comes to a grinding halt as different trading partners wait to make sure they aren’t about to infect their own people. Depending on the product and demand, supply chains might change until the World Health Organization says things are under control. That could leave the U.S. paying more for a commodity or getting less of a certain product than we normally do. Everything from cars to coffee sales has taken a hit, and analysts are predicting an extreme slowdown in the growth of the Chinese economy over this first quarter. Doubt. Since Wall Street investors are all about predictions, any event that leaves them questioning what happens next will likely spook the markets. We’ve already seen this play out several times this year with news about Iran, the impeachment, and election news. With something as rare as a global health crisis, no one knows exactly what’s going to happen. It could be over soon or it could force another economy to be quarantined and shut down, in which case the markets will see even more severe losses. In the meantime, the worrying will have investors treading a little more cautiously than normal.
Some turns in the market can be hard to pinpoint. With something like the coronavirus, you’ll see both a direct and indirect economic impact. For now, I’m praying for the health of those affected and a quick end to this outbreak.
Taylor was raised by good ol' blue-collar workers and following in their footsteps led him to take on massive debt at a very young age. It didn't take him long to realize having debt wasn't his cup of tea, and he worked his tail off so he could enjoy financial freedom and independence. As an entrepreneur and financial professional, his work has been quoted and published in a variety of different media on topics such as financial management, budgeting, saving, business, investing, and more. Read more about Taylor at GoFarWithKovar.com
Legal Disclaimer: Information presented is for educational purposes only and is not an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. To submit a question to be answered in this column, please send it via email to Question@GoFarWithKovar.com or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.
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This concludes my three-part series on the Ten Biggest Mistakes Parents Make (and how to stop making them!). For the first two columns in the series, go to johnrosemond.com. The mistakes covered to date include: 1. Explaining oneself to one’s children. This common blunder is why so many children are called “argumentative” when they are doing nothing more than taking advantage of opportunities provided by their parents. 2. Placing relationship with one’s child in front of providing leadership (authority) to one’s child. You want your child to like you? Don’t you have enough adult friends? 3. Giving children lots of choices. The more choices I must contend with, the more stressed I am. Do you think that might apply to children as well as adults? 4. Believing that people with capital letters after their names know what they are talking about when it comes to children. Said letter-mongers have been giving bad advice since the American parent began listening to them. No end is in sight. 5. The self-humiliating practice of getting down to the child’s level when addressing a child, also known as the “sycophant squat.” Children do not obey people who look like lackeys. 6. Ending what parents think are instructions to their children with the question, “Okay?” Children do not obey people who sound like lackeys. 7. Using consequences that are meaningless, otherwise known as time-out and other forms of flailing at charging elephants with flyswatters. Picking up right there, Number Eight (these are in no particular order, mind you) is putting your marriage on a shelf in a seldomvisited closet and “parenting.” This is also known as acting like you took this vow on your wedding day: “I take you to be my husband/wife until children do us part.” It may sound paradoxical, but husband and wife do a much better job of raising
kids than do dad and mom. In a family, children should come no less than third – as in, marriage, parents, children. The ninth Biggest Mistake Parents Make is using recreational John time (e.g. vacations) to do what Rosemond children want to do. Consider that visiting a foreign country may cost less for a family of four than going to Dizzy World and bulldozing through crowds of people, many of whom are rudely pushing two- and three-wide strollers. Cost includes the stress of such insane activities to otherwise sane adults. There are plenty of peaceful places in the North American hemisphere that are both enjoyable and educational. Name one ride at Dizzy World that is as stunning as the Grand Canyon (where children can learn basic geology) or Mount Rushmore (where children can learn American history). You can’t! For lasting learning, try Colonial Williamsburg, Virginia (until they were on-site, our kids were convinced they would hate it). Ask yourself: Who earned the upcoming vacation? YOU did! Need I say more? And the tenth Biggest Mistake –Ta Da! – is causing children to develop Vitamin N deficiency. This nutrient – the most powerful two-letter word in the English language – is essential to the development of emotional resilience, which is widely recognized as key to good mental health. A lack of Vitamin N accounts for the proliferation of “safe spaces” on college campuses where run spoiled rotten snowflakes who become “triggered” when confronted with a world that does not recognize their specialness. Vitamin N builds strong character, which builds strong communities. And NO, if you haven’t figured out what I mean by Vitamin N, there’s NO way I’m going to tell you. Get it? How does one stop making the Ten Biggest Parenting Mistakes? One simply stops making them. Family psychologist John Rosemond: johnrosemond.com, p arentguru.com.
