Minnesotans can relate to the coronavirus crisis in these terms: We are in the financial equivalent of driving in a blizzard.

Sure, the newest cars have all kinds of new technology to keep us on the road in these conditions, the anti-lock brakes, stability control, collision avoidance and all-wheel drive, but if things get bad enough, the only solution is to drive more slowly until either the storm lets up or we have to stop.

For the financial markets, coronavirus has reduced our visibility to next to nothing. The circuit breakers have kicked in, the Fed is cutting rates and buying paper, but, like our car's gadgetry, there is little that can be done until the blizzard clears and we start getting enough information for the markets to function properly.

The black swan

The term black swan refers to an event that was previously thought to be nearly impossible. In the second century, black swans had never been seen and were assumed to not exist.

However, in 1697 black swans were discovered in Australia. Black Swan Theory describes very rare and highly consequential events that are impossible to predict. The coronavirus is the ultimate black swan. Although pandemics are known to exist, did you or any financial expert that you know of think a virus from China would take down the longest bull market in history?

Information is critical

The price of an individual public company's stock is typically based on a large and continually updated set of publicly available information regarding the company's business. The most critical aspect of this information (called "guidance") relates to forecasts of future business conditions: Sales, costs and future expected profits and losses.

Many large companies themselves provide this guidance and there exists an army of stock analysts whose job it is to forecast future stock prices based on this and other information. Currently, a lot of this information is either not available (because the company has withdrawn its guidance, which has happened a lot recently) or is unreliable (how many people are going to take cruises in September?).

The coronavirus is a stock market blizzard: Until visibility improves, the stock market will be extremely volatile and could easily sell off further.

Asset allocation

This brings me to another lesson that the coronavirus has retaught us: asset allocation. Asset allocation is a fancy term that simply means that the optimal composition of your investment portfolio changes over time.

When you are young and don't need your money for a long time, asset allocation says that you should hold more stocks than bonds so you can benefit from the higher returns associated with stocks and when you have the time to ride out the occasional volatility — the storm that disrupts an evening commute — which is common in the stock market.

The opposite is also true. When you are getting closer to needing your money, as you are when approaching retirement, you can less afford a big, temporary stock market dive and thus should hold more bonds. The point is that if you are properly allocated, you don't care about the recent market turmoil, and you don't have to do anything.

Emergency checklist

In aviation, checklists are used extensively. There are checklists for starting the plane, taxiing, takeoff and landing. There are also emergency checklists. The purpose of these checklists is to ensure that certain actions are taken in a defined sequence every time. Checklists are also valuable in emergency situations like driving in a blizzard, when stress and fear can interfere with your ability to execute the correct sequence of actions.

The last couple of weeks in the market have been rough, and it's time to review our investing emergency checklist: R-E-L-A-X. Recognize that we are in a market gripped by fear and uncertainty. Manage your Emotions — you do not make good decisions about anything when you are emotional. Look into the future — don't get caught up in the daily and hourly financial headlines. Asset allocation — know what yours should be for your age and stage. EXpect more volatility and bad news.

So, the snow is coming down and you're on the road with other cars trying to stay out of the ditch. It's pretty bad out there. So, review the RELAX checklist and sit tight. I think your driveway is just around the corner.

William Acheson is a financial services executive in Waconia.