COVID Woes-Investors Need to Stay Positive!

COVID Woes-Investors Need to Stay Positive!

We have been so proud of our contemporary lives, haven’t we? Electric cars, tech-savvy lifestyles, social media being the new communication platform. But tell us- are your friends still posting stories from exotic locations on Instagram? Or are upcoming sports events and new pubs trending on your Twitter feed? As much as it disheartens us to admit- We don’t think so!

With the pandemic, COVID 19 taking a massive toll in our daily lives. Our Government and regulatory authorities have instructed us to practice procedures that we never dreamt of adhering to in our wildest imagination- unprecedented war time measures like self-isolation and social distancing, as they are key rudiments to keep the novel coronavirus at bay.

GOOD READ- Staying Positive while ABS Talks About COVID-19 Driven Impact on Businesses

COVID 19 Crossing Borders Swiftly

As the virus travels across the globe claiming lives and hampering health, below are the recent developments pertaining to it-

  • The United States of America has surpassed China in terms of confirmed virus cases with over 85.9k cases against China’s 81.7k, according to a JHU CSSE dashboard.
  • As on 27 March 2020, there are globally over 465k cases, 21k deaths and 200 countries affected by COVID 19, according to the World Health Organization (WHO).
  • WHO affirmed that more than 150 countries and territories still have fewer than 100 cases.
  • WHO’s COVID-19 Solidarity Response Fund has raised more than USD 95 million.
  • Governments like that of the US, Australia and India have been announcing proactive stimulus packages (USD 2 trillion, AUD 189 billion and ~ USD 2.1 billion, respectively) as an aid to curb virus repercussions in their respective economies.

Stock Market in Doldrums – Patience is the only Key!

It has been interesting to watch the sinusoidal trend of the stock markets in the past few weeks- record lows, sudden surges, massive selloffs followed by periodic gains, making us recall American investor Charlie Munger’s statement- “Investing is not supposed to be easy.”

Markets have majorly traded in red, however investors who held on with their portfolio strongly gained with few sudden spikes.

Let us look at the market trends from this week from across the globe showing some positivity for the market participants-

  • On 24 March 2020, the Dow Jones Industrial Average zoomed by more than 11 per cent, marking its biggest single-day percentage gain in decades.
  • Following the same trend, the benchmark S&P 500 was up by approximately 9 per cent.
  • On the subsequent day, 25 March 2020, the benchmark S&P 500 settled in green and was up by more than 1 per cent.
  • On 25 March 2020, the Dow was up by 2.39 per cent, exhibiting a back-to-back gain trading session
  • On 26 March 2020, Australia’s S&P/ASX200 index closed trading at 5113.3, up by 2.3 per cent (115.2 basis points). Interestingly, the day marked the Aussie stocks rally well for a third straight day.

ALSO READ: Fighting a Pandemic- Good News from Economies & Stock Markets

While a lot of factors can be attributed to this sudden rise in the stock markets (like virus inflicted recovery numbers increasing, medical sciences proceeding with vaccine trails), the most instrumental factor seems to be the economic rescue package in the formal of financial help being introduced with immediate effects in countries by governments and central banks.

Such positive moves at the time of crisis are likely to aid investors in regaining their confidence while they sail on a rough market tide.

GOOD READ- Exchanges Record Back-to-Back Gains on Stimulus Packages- COVID Battle Intensifying?

End of ASX Bear Market?

Concentrating closer to home, the S&P/ASX200 index did not maintain its green streak and settled lower by 5.3 per cent (270.9 basis points) at 4842.4 after market close on 27 March 2020.

However, investors can still remain optimistic because the exchange has made it very evident that opportunistic announcements from businesses related to COVID 19 bears the potential to warrant some security to their investments.

Also, we would like to remind that you that pioneering investors like Warren Buffett have been rigid advocates of long-term investing, to be fearful when others are greedy and greedy when others are fearful and be wary of temperament in crisis time rather than intellect- it could be wise to consider these tips- don’t you think?

A day of market decline (that too on a Friday!) does not indicate that there is no light at the end of the tunnel and the bearish sentiment may still twist next week and offer some opportunities to be tapped.

This week has clearly demonstrated that the ASX is bound to make unexpected but very welcoming comebacks.

So, stay optimistic even when the S&P/ASX200 has wiped out much of the rebound witnessed in the previous three sessions.

Bottomline

As we bid goodbye to another eventful yet tricky week, share market enthusiasts remain excited to gauge all that is store for next week. The low interest rate regime, a weak Australian dollar and business restrictions are likely to continue to influence the share market sentiment.

In such times, remaining optimistic will only boost confidence on personal and other levels of our lives.

As WHO’s Director-General Dr Tedros Adhanom Ghebreyesus recently asserted-

“This is much more than a health crisis. The pandemic lingers and has been taking a colossal toll on several parts of our life. But we should remember that we have overcome a number of pandemics and crises in the past. We will overcome this one too.”


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