Update March 20, 2020
The markets remain volatile—slightly up one day, down the next, rinse, wash repeat—and frankly, we expect this to continue until news surrounding the Coronavirus stabilizes. There are many predictions and opinions about when that could happen, but we are not virologists or pandemic experts. We do believe with more testing will come more cases which means to us, any true normalcy in the markets and life, is probably at least a few weeks away.
Protect Yourself
As we all huddle around our various news sources—starved for more information, we make ourselves slightly more susceptible to hackers. Our cybersecurity experts have noted an uptick in in phishing scams and malware attacks associated with COVID19. Be mindful of any and all emails, links and other notices coming through to your business email (or personal email—if you are now you’re working from home on business devices).
Anything asking for any money (charity/donation requests) is immediately suspect. Do not hit any links about “cures” and/or “vaccines”—especially if there is a request for your personal information prior to accessing the content.
If you are unsure about anything you receive—err on the side of caution and avoid it. Better safe than sorry. We will have more information on this topic soon.
Circuit Breakers
The market volatility as triggered the circuit breakers a few times, so we thought now would be a good time to just answer the question: what are stock market “circuit breakers”?
Just like circuit breakers in your home prevent an electrical surge from damaging your appliances, a market circuit breaker is designed to do the same thing, i.e., prevent damage.
Stock exchange circuit breakers are limits put in place to keep markets orderly and curb panic-driven selling. Currently, there are limits at 7%, 13%, and 20% for the broad markets; these are known as Level 1, 2, and 3, respectively.
A decline of 7% triggers a Level 1 trading halt, which is like a parent sending a toddler to time out to get calm; a level 1 halt lasts 15 minutes. A subsequent decline to 13% in a day triggers a Level 2 halt, which lasts another 15 minutes. A decline of 20% in a day would trigger a Level 3 halt, which stops trading for the remainder of the day.
While circuit breaker and trading halt sound ominous, these measures are designed to help markets function in an orderly fashion during times of stress.
Hang In There
Everyone at Formidable sincerely hopes you and your family are doing okay. If there is anything we can help you with—please do not hesitate to reach out.
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