I spent the better part of the last three weeks on the phone with clients of my asset-management firm and friends who wanted a sounding board about markets. That’s not a complaint. For me, one bright spot of this crisis has been a return to indulgently long phone conversations, a throwback to a simpler time before smartphones and social media.

Three questions came up routinely in those conversations, which makes me think they’re on a lot of investors’ minds. My thoughts are certainly not novel. They borrow liberally from investing giants such as Warren Buffett, Jack Bogle, Seth Klarman and others too numerous to name, and financial writers who have covered similar ground over the years and in recent days. But given the opportunity for costly mistakes during market upheavals, it never hurts to revisit some common pitfalls. 

The question that came up most is whether investors should sell their stocks now and buy them back later when they decline further. The spread of coronavirus and the resulting economic damage is expected to worsen. As it does, the thinking goes, stocks will continue to decline.

It’s a natural impulse, but it misses a crucial aspect of the way markets work, which is that prices instantly reflect investors’ expectations about the future. That’s probably why, to many investors’ surprise, the U.S. stock market held its ground after dreadful news last Thursday that 3.28 million workers filed for unemployment the previous week, nearly quintupling the previous record. While exact numbers are never known in advance, a surge in initial jobless claims was widely expected well before the Labor Department released its official tally.

More bad news is expected. Goldman Sachs Group Inc. said on Tuesday that it expects the U.S. economy to shrink by an annualized 34% in the second quarter and unemployment to rise to 15% by mid-year before a recovery takes hold in the third quarter. That, too, is reflected in stock prices. The prospect of future declines depends on whether expectations become even more dire. But unless investors can predict if the outlook will darken further, there’s no reason to think they can anticipate the market’s next move.   

And that’s only half the battle. Those who manage to get out before another market drop must decide when to get back in, which is never clear. Market turns tend to be sudden. By the time it feels safe, the market is often sharply higher, leaving investors with regret about missing the bottom. Then comes the temptation to wait for the market to revisit its lows, an opportunity that may never come.

I know investors who sold their stocks when Lehman Brothers collapsed in September 2008, months before the market bottomed around the financial crisis. What seemed like a stroke of genius at the time became a harrowing trial. The market unexpectedly turned higher in March 2009 and never looked back. More than a decade later, some of those investors are still waiting for that elusive re-entry despite the likelihood that the market will never revert to that September 2008 level.

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