We have seen an incredible reduction of stock markets around the world. Falls of over 30% have been experienced since mid February when the panic started setting in.
What is surprising it that markets remained calm throughout the initial scary days of the virus, but have only recently become spooked, despite significant action and stimulus from Governments world over and a very high recovery rate from those previously infected by COVID-19.
If find it quite surprising that it was seen prudent to close borders, cancel group meetings, close down events and take extreme action on many fronts, yet Governments chose not to close the stock markets to avoid any financial loss, panic or opportunism. Given the seriousness and scale of the situation, surely that would have been appropriate to protect everyone’s pension funds and investments.
For those that haven’t exited, it is hard to know whether to stay in for the ride or exit to safety licking your wounds. For those who have investable funds it is difficult to know if it is the right time to jump in or wait for further carnage and discount. Such is the dilemma of investing that there are always too many choices and too many possibilities.
There is no doubt we are in for a very bumpy ride, so expect volatility to remain until there are the inevitable signs of containment and economic recovery.
