Courtesy Kelly Burch
The author in her home office.
Last week the buzz about the coronavirus and its impact on global markets reached a crescendo. As I listened to the news, it served as a constant reminder to me: I really need to open that investment account I've been considering, I thought. Now's the time to do it.
For months I had been contemplating moving a portion of my daughters' savings from high-yield saving accounts to an investment account. The money is a general savings fund that I plan to give them when they're young adults.
Since they're only 1 and 5 right now, the money has plenty of time to grow. I wanted to leverage the historically higher return rates of the stock market for my daughters, rather than letting their savings earn just 1-2% interest in the bank.
Despite my interest in opening the account, the task kept getting pushed to the back burner. Then, the coronavirus and its economic impact pushed it back to the front of my mind.
The market downturn was a reminder to invest
As I listened to continuous news of stock market drops, I realized that now is as good a time as ever to open an investment account. With the markets down, stocks are cheaper. Since I was planning on opening the account anyway, buying stocks at a bargain price seemed like a great idea.
To be clear, I wasn't gleeful about the idea of potentially profiting off an economic downturn. I have no idea if this will be the right choice in the long run. However, since I was planning to invest anyway, doing it now while prices are down was particularly appealing. I wasn't very concerned about an additional drop, since I plan to have the money invested long term.
I opened the account over the weekend, and the girls' contributions - $2,000 total - were added on Monday, the same day markets plunged nearly 8%.
What the professionals say about investing amid coronavirus-related market volatility
Keith Fitz-Gerald, an investment analyst, says that I did the right thing sticking to my plan despite market volatility brought about by coronavirus fears.
"People who were planning to invest definitely should continue investing," he says. "Now is a good time to buy if you have the right perspective."
If you're looking at the long term (like I am, investing money I don't plan to touch for at least 15 years), buying now is a safe bet. Plus, the money I'm investing is savings that would be nice to have for my children, but it's not essential money I'll need, like a retirement fund. That frees me to take some risks with it.
"Playing offense even when the world seems like it's going to hell in a handbasket is always the better choice than missing an opportunity," Fitz-Gerald says.
Now that my investment account for my daughters is open, I'll be resisting the urge to check in on it. I'm just going to step back, and trust the market to do what it has done historically: grow.
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
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