Even if you aren’t into stocks, coronavirus fears have touched your finances
As if the novel coronavirus wasn’t enough to worry about, the stock market’s own fears about it might have you worried about your next financial move.
We asked Columbia Bank CEO Clint Stein for some guidance on the ripple effect, both from coronavirus and the stock market’s wild swings as a result, on the following:
▪ Car loans: “Most financial institutions still have a significant amount of liquidity and will want to lend to help offset earnings pressure created by the rate environment.”
▪ Home refinancing: “Mortgage rates are at historic lows and the decision to refinance should be based on each individual’s circumstances. However, for the majority of homeowners there’s likely an opportunity for significant savings through refinancing their mortgage.”
▪ Interest rates on CDs and savings accounts: “Long-term treasury rates are at historic lows today. The 30 year U.S. Treasury yield fell below 1 percent for the first time ever. Interest rates on bank deposits generally follow the yield curve. The current yield curve, coupled with the Federal Reserve’s rate cut last week, means consumers should expect rates on deposits to come down. If an institution is still offering the same rates as they were at the beginning of the year, you should really try to understand the business fundamentals driving their pricing decisions.”
▪ Is it really a smart thing to buy stocks now or wait? “It depends on an individual’s risk appetite and investment time horizon. It’s nearly impossible to time the market, so the better alternative is to develop a solid financial plan centered around your goals and objectives, then stay on the course laid out by your plan.”
▪ What’s the bigger economic risk now? Which sectors are projected to be hardest hit? “The biggest economic risk is how the threat of the coronavirus is changing consumer behavior. Those impacts can be seen in the hospitality, travel, and entertainment sectors right now. Some businesses are seeing a disruption in the timing of their cash flows. For some, this is just a timing issue and they will resume normal operations. For others, the disruption will result in revenue that won’t be made up. This means some businesses will see lower earnings and each company will have to evaluate how to respond. This could have an impact on employment.“
This story was originally published March 10, 2020 at 5:05 AM.
