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Coronavirus: Financial experts in Kingston discuss the economic impact of COVID-19

Financial experts talk economic impact of the coronavirus
WATCH: Turbulent stock market has people wondering about investments.

Stock markets bounced back on Tuesday, but people with long-term investments such as RSPs may wondering how long the market turbulence will last.

Some people have lost thousands of dollars from their retirement nest egg. Both the Toronto and New York Stock Exchanges have been in a panic-selling mode in recent days, fuelled by fears of the economic impact of COVID-19, the illness caused by the novel coronavirus.

READ MORE: Coronavirus: Morneau says government support for quarantined Canadians is in the works

Wei Wang, an associate professor of finance at the Smith School of Business at Queen’s University, has been watching the markets closely.

“There are busts, there are booms, but I just never expected the trigger for this potential recession could be the virus, which we don’t know yet, but this could potentially trigger the recession in the North American economy,” Wang said.

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Financial expert Dwayne Henne on the coronavirus effects on the markets
Financial expert Dwayne Henne on the coronavirus effects on the markets

Wang is also co-author of a book entitled Corporate Financial Distress, Restructuring, and Bankruptcy. Right now, he says, there’s plenty of uncertainly about how bad the situation is and will be, and that means less spending.

READ MORE: ‘Pre-pandemic mode’: How Canadian long-term care homes are preparing for coronavirus

However, resolving that uncertainty will boost spending, and Wang hopes the federal government will make some moves.

“New policies rescuing small businesses. To encourage maybe lenders to provide, to waive interest, or delay interest to some of the small business loans and even maybe allow a longer grace period if borrowers cannot pay,” he said, describing some of those moves.

COVID-19 and the impact on the financial markets
COVID-19 and the impact on the financial markets

Pierre Gaumond is an investment advisor and financial planner with BMO Nesbitt Burns in Kingston.

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“If there’s one thing you have to remind yourself is don’t panic, this is not the time to panic,” Gaumond said. “Take note of where you are and where you want to be and understand how you are going to get there and try as much as possible to be calm, because this, too, will pass.

“Understand your risk tolerance — so how much volatility you can accept — and then you’ll be fine. There’s not a problem.”

Both Gaumond and Wang are hoping that the financial roller coaster ride “doesn’t” continue but of course, only time will tell.