OK, What’s Next?  SARS?

    Investors have waited nervously for the past 6 months while the war build up was underway, using it for an excuse to not invest.   Now that the war has been settled, terrorists aren’t attacking in waves, and germ warfare didn’t materialize, what’s next for us to worry about?  

    Some 'big picture' analysts are already beginning to paint a doomsday scenario around SARS (Severe Acute Respiratory Syndrome). Stephen Roach, analyst at Morgan Stanley, predicts SARS will play a big part in sending the world into a serious global recession. One real doom-and-gloomer is comparing the potential for SARS to the 1918 influenza epidemic that killed 18 million people. I cast that kind of stuff into the same round file I tossed the doomsday predictions in the days after 9-11.

    Yes, SARS could develop into a full-fledged worldwide disaster. Researchers and medical institutions could fail to come up with an answer. 

    But for now let's deal with facts. As of this writing in mid April, there have been 2,800 people infected with SARS worldwide, (more than half of them in China, including Hong Kong), of which 103 have died. Canada is one of the countries hardest hit, with 226 people infected, of whom 10 died. Those cases have been traced to people flying from Asia. China admits it mad the problem worse by being slow to recognize what was happening and not allowing World Health Organization medical experts in to look at the early cases.

    Cause for concern and heroic efforts to find a solution? Absolutely! But let’s put the situation into some kind of perspective regarding its current level of danger:   Although considered cured, tuberculosis still causes 2 million deaths a year world-wide. Malaria kills another 2 million people per year. The flu still kills roughly 36,000 people in just the U.S. each year. HIV/AIDS, more than 42 million cases worldwide, millions of deaths.

    Is 2,800 cases and 103 deaths so far worldwide from SARS a cause for panic and doomsday predictions? Not in my book. By the way, 103 deaths worldwide is also less than half the 277 deaths last year from West Nile disease, in the U.S. alone.  Do you let West Nile virus affect your investment decisions?  I don’t.  And I wouldn’t get too carried away worrying about SARS.

    Ever since I have been helping people make smart decisions with their money, there has been a long string of big, unprecedented things to rattle investors:  The stock market crash of 1987, the 1989 S&L crisis threatened our banking system with cascading bank failures, the 1991 Gulf War, NAFTA passed in 1993 prompting Ross Perot’s “great sucking sound”, imminent war in Palestine (pick a year), impeachment, Russian defaults in 1998, Y2K, 9-11, you name it.

    Sir John Templeton once said, the best time to invest is at the point of maximum pessimism.  Many facts now point to an improving economy, smoother world politics and stronger corporate earnings. If you have been hesitating to invest just because of negative news, perhaps now is the time to invest.  Call for an appointment to discuss risk reducing ways to invest that will be in tune with the times as well as your comfort level.