Potential pandemics can be frightening. You can't turn on the news on TV or read online without seeing more concerning reports about the global spread of the coronavirus. The numbers are rapidly mounting -- over 82,000 confirmed cases and at least 2,800 deaths.
Governments across the world are taking action to prepare for the situation to worsen. Unsurprisingly, all of this is taking a toll on the stock market. All of the major market indexes have fallen significantly in just a matter of days. Many investors are wondering what they should do in response to the outbreak.
I've decided the course of action that I'm taking. Here are all the stocks I'm selling if COVID-19 keeps spreading.
Image source: Getty Images.
My short list
My short list of stocks to sell if the coronavirus epidemic truly becomes a pandemic is really short. The number of stocks that make the list totals... zero. That's right. I'm not planning to sell any of the stocks that I own if the coronavirus continues to spread globally.
Are there stocks in my portfolio that will be affected if the crisis worsens? Absolutely. Some of them have publicly stated that the viral outbreak is already affecting their businesses. Apple (AAPL 0.17%), for example, warned that it won't achieve its previous first-quarter revenue guidance because of the toll the coronavirus is taking in China. The tech giant also could delay the launch of its new iPhone 9.
Several other stocks that I own will also feel some negative effects of the coronavirus scare. Disney (DIS +1.37%) has shut down its Shanghai Disney Resort and Hong Kong Disneyland parks. It's not a stretch to think the company's theme parks in other parts of the world, including the U.S., could see attendance drop off.
On the other hand, some of the stocks in my portfolio are benefiting or could benefit from the epidemic. Gilead Sciences (GILD +1.02%) shares have jumped as the big biotech makes progress in testing an antiviral drug for treating COVID-19. A World Health Organization official even stated that Gilead's remdesivir is the "one drug right now that we think may have efficacy."
Teladoc Health (TDOC +0.38%) CEO Jason Gorevic stated in the company's Q4 conference call last week that "it's still too early to be able to quantify the impact that the outbreak could have on our business." However, it stands to reason that many patients might prefer the virtual physician visits the company offers instead of going to a physical doctor's office where they could be exposed to the virus. Teladoc is already equipping its healthcare professionals to evaluate and treat patients at risk of COVID-19.
Some of the stocks I own shouldn't feel an impact one way or the other from the coronavirus. A good example is Vertex Pharmaceuticals (VRTX +0.98%). Patients won't quit taking the biotech's cystic fibrosis drugs because of the viral outbreak.
Why I'm not panicking
But I'm not selling any of my stocks, regardless of how they're affected by the coronavirus. I'm not panicking for two reasons.
One is that I'm trying to keep the current healthcare worries in perspective. I don't think the coronavirus threat should be dismissed. It's serious.
However, it's important to remember that there are much worse healthcare issues than the coronavirus and COVID-19 that haven't brought the global economy to its knees. The CDC estimates that there have been more than 29 million cases of the flu so far this season, with 16,000 deaths. Remember those numbers the next time you see coronavirus statistics.
The main reason I'm not panicking and selling stocks, though, is that I invest for the long term. I don't buy any stock that I don't plan on holding for at least five years. Sure, sometimes my take on a company's business prospects change and I sell it earlier. But those are the exceptions.
If I thought that the long-term business prospects for Apple, Disney, and other stocks that I own will be much lower because of the coronavirus, that would be a different story. My view, though, is that there will be a lot more people buying products in Apple's ecosystem over the next several years as high-speed 5G networks are adopted. I think that Disney is going to keep churning out blockbuster movies and that kids (and adults) will want to go to the company's theme parks five years from now -- and 50 years from now, for that matter.
The truth is that I don't think any of the stocks that are in my portfolio will have their long-term prospects materially changed by the coronavirus outbreak. That's why my shortlist of the stocks I plan to sell if the coronavirus keeps spreading is empty.
The oracle knows best
Warren Buffett has given lots of great investing advice through the years. Perhaps the best advice that the Oracle of Omaha has ever provided was to "be fearful when others are greedy and be greedy when others are fearful."
A lot of people are fearful right now with the coronavirus outbreak. Many investors are dumping their stocks based on fear. But as frightening as the threat of a global pandemic might be, the best thing to do is to remain calm and keep things in perspective. Solid businesses will continue achieving success over the long run regardless of any temporary pullbacks in their stock prices. Buy shares of those businesses and hold onto them. You'll be glad you did.
