By: T. Pacini
Since the start of the Coronavirus pandemic, the markets have been concerned. That early concern was shown to be justified; once it became clear this was not a Chinese phenomenon and there would be no quick economic rebound, markets dived and are at risk of breaking down. The Ibovespa, the Dow Jones, the S&P and the Nasdaq indices have all fallen at least 25% from records high registered in February. This is the worst crisis since 2008 and threatens to have the impact equivalent to the Wall Street Crash of 1929.
Those actively trading the market have had plenty of time to get their money out. Sure, maybe not at the top, but they will likely have made money after a decade of stock market gains in the U.S. However, those with money invested in pension funds and the like will not have been so lucky.
Governments all over the world have been trying to support markets, or at least provide liquidity, but the fact is until we know how bad the Coronavirus health crisis will get, we can’t be sure that the markets have bottomed out.
In the meantime, markets are on a wild ride; prices tank, circuit breakers are tripped, only for further losses or wild recoveries ensure. What is an investor to do? Most analysts recommend not joining this wild ride just yet!