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Don’t let a virus influence your financial wellbeing.

Fueled by fear of the Coronavirus, the investment world has taken a sudden dive. I believe we’re going to hear the term “supply chain” quite frequently in the weeks ahead. I’ve often reminded readers that the world is much smaller, and likened the global economy to a spider web with multiple connections.

For example, our own General Motors does significant business in China, South Korea, Mexico and Canada. Production and trade clearly cross many borders.

From a business perspective, COVID-19 as the virus is called, has been a monkey wrench in the wheels of production. To a certain degree, it’s paralyzed the world. We’re feeling the impact here of a rock dropped in a pond halfway around the globe.

That’s the reality of today’s shrinking world. Unfortunately, the Coronavirus is going to demonstrate the downside of our interconnected world.

When we discuss manufacturing we tend to think of cars and trucks, cell phones and iPads. But if this slowdown continues, we’ll soon see shortages in areas as diverse as prescription drugs and toys.

From a financial perspective, consumers should be prepared for product shortages and price fluctuations, especially in the near term.

With such uncertainty, I anticipate politicians will claim that businesses are taking advantage of a bad situation and gouging the public.

But in free markets, the reality is that supply and demand determines the price of goods and services. And in the midst of shortages and uncertainty, production costs and consumer prices will likely continue to fluctuate and trend upward.

Nobody has a reliable crystal ball, but I anticipate it will be quite a while before things stabilize. As consumers, you should all be prepared, not surprised.

As investors, you need to review your long-term goals and remind yourself why you became an investor. It’s been quite a while since we’ve seen this much fear in the markets. But successful long-term investors are successful because they know how to climb the wall of fear. They have the iron stomach it takes to maintain patience in this environment

In any downturn, my main concern is with retirees who are in the income phase of their lives. The ones who are using their nest egg t generate the income needed to maintain their lifestyle. If you’re in this situation, you need to be on high alert.

If you have a nest egg of $100,000 and you withdraw $3,000, (equal to 3 percent annually), you’re likely okay. But if that $100,000 drops to $95,000 and you continue to withdraw $3,000, you’re suddenly taking out more than 3 percent.

Continue on that path and you could deplete your nest egg sooner than planned. Households in this situation need to pay close attention and probably meet with a financial advisor to assist with a distribution strategy.

Fear and uncertainty are not pleasant. Individuals process and react differently, but investors need to understand that the financial world isn’t all blue skies and sunshine. Sometimes there’s a storm on the horizon. And it appears that time is now. I hope you’re prepared.

On a more positive note, I’m pleased to share that I’ll be signing my new book at noon on Saturday, March 28. I’ll be at the Barnes and Noble in The Village of Rochester Hills. Come join me.