How Can You Recover from Coronavirus Financial Market Impacts?

Coronavirus financial losses may still be haunting investors who were impacted by the global pandemic and plunging stock market earlier this year.

How Does Coronavirus Affect the Stock Market?

In the first few months of the year, the coronavirus rapidly spread from Wuhan, China to affect the rest of the world. The pandemic led to business closures, deaths, global shipping restrictions, changes in consumer purchases, and unimaginable coronavirus economic impacts. As a result, many stock options dropped rapidly in February and March.

For example, the week ending Feb. 28 saw the worst stock performance since the financial crisis in 2008. During this week, the Dow Jones Industrial Average dropped 12% and the MSCI’s world index was down nearly 10% for the week. The stock performance was reportedly reflected in the global economy, with European shares falling around 1.5 trillion USD and Asian stocks seeing similar drops.

Even if consumers didn’t have large sums of money invested in the stock market, they may have suffered negative coronavirus financial outcomes. Many retirement options rely on stock performance – meaning that workers without an investment portfolio may have seen the consequences of the global economic downturn.

How Much Did Investors Lose?

Investors have lost thousands or even millions of dollars – varying depending on how much they had invested.

In July, The New York Times told the story of an amateur investor who turned $15,000 to $1 million through the Robinhood app. However, in early July, the man reportedly lost nearly everything due to the volatility and risks of day trading. Now, the investor plans to appeal his case to financial regulators.

“They make it so easy for people that don’t know anything about stocks,” the man told The New York Times. “Then you go there and you start to lose money.”

Unfortunately, this story may be common – especially amidst the coronavirus financial stock crash seen earlier this year.

Although apps like Robinhood have made investing more approachable to the average consumer, most people lack the financial expertise to rapidly respond to a huge upheaval like the coronavirus pandemic. This could have resulted in unexpected financial losses. Even if consumers enlisted the help of a qualified investment advisor, they may have been given bad advice which resulted in financial injury.

How Can You Recover Stock Market Losses?

Luckily, economists agree that the stock market is recovering after historic losses. Despite the dramatic market plunge seen at the beginning of the pandemic, the stock market has recently returned to its performance before the initial coronavirus scare. USA Today noted that in August, the S&P 500 eclipsed its previous high from February before the pandemic hit.

These trends have continued into the fall. For example, on Sept. 28, the Dow Jones Industrial Average rose over 400 points – putting it up 1.5%. Similarly, the S&P 500 rose 1.6% and the Nasdaq Composite rose 1.9%. These three major averages help track the performance of the stock market in general.

Although unemployment continues to be high and Americans all around the country are struggling to pay rent or provide for their families during the coronavirus, the stock market is one area of coronavirus financial health which may be on the rise. With the stock market recovering, investors may be able to look towards recouping their losses.

In many cases, consumers rely on advice from stock experts or financial advisors when making investing decisions. These experts are supposed to help guide investors to better financial health through smart investing decisions and wise risk analysis. Financial advising services can be helpful in recovering from the stock market crash – as long as financial advisors give good advice.

Can You Sue for Bad Financial Advice?

Unfortunately for many, the negative financial consequences of the COVID-19 outbreak may have been made worse by poor financial advice.

Although no financial advisor can be expected to predict major stock market events, advisors have a fiduciary duty to follow Regulation Best Interest practices. According to the U.S. Securities and Exchange Commission, these obligations include:

• Disclosure Obligation: Financial advisors must provide the required disclosures before recommending certain decisions on or at the time of making decisions.
• Care Obligation: Financial advisors are required to exercise reasonable care, diligence, and skill when making financial recommendations.
• Conflict of Interest Obligation: Financial advisors are required to address and avoid conflicts of interest through enforced written policies.
• Compliance Obligation: Financial advisors must comply with Regulation Best Interest obligations through enforced written policies.

If your financial advisor fails to satisfy these obligations, they may recommend financial decisions which have a negative effect on your financial health. If this happened to you during the coronavirus outbreak’s stock market crash, you may be eligible to take legal action.

Free Coronavirus Financial Impact Claim Evaluation

If you followed the advice of a financial advisor during the COVID-19 pandemic and lost money as a result, you may be eligible to file a coronavirus financial impact lawsuit and seek compensation for your losses.

Get a Free Case Evaluation