Sailing through Covid-19 turmoil and Battling against Market volatility

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Sailing through Covid-19 turmoil and Battling against Market volatility

 Sailing through Covid-19 turmoil and Battling against Market volatility

The jostling wind crashing hard against the movement struggles to not only slow down the pace but battles to reverse the direction. Amidst such resistance, when the final fate yet remains unsure, the emergence of doubts and distrust becomes inevitable. The volatility soars high, and the stability in all aspects takes its cue to leave.

While the world seemed busy in its daily commotions, Covid-19 as a raging storm has shaken the roots of its optimism. The question about the future concern minds of every individual. Affected over 0.8 million people and killed 40,958 across the world (as per WHO situation report on 1 April 2020) ever since its origin, coronavirus certainly seems like a dreadful dream. As the rate of infection takes a skyrocketing momentum, the chaos both within the people and outside is evident.

Source: NZX

The downward movement of the economy and the bearish trends in the stock market provide clear evidence of the level of distress suffered at the hands of coronavirus. The prominent fear is that the economy would be left at stake when dealing with the medical emergency. Propelled by the ambiguity and dread, many investors have left the market as New Zealand stock market acknowledged massive sell-off. S&P/NZX 50 has fallen from 12073.345 points on 21 February 2020 to 9870.556 points on 2 April 2020, signalling huge market volatility.

Government’s Endeavour towards the turbulence

Amidst the dwindling market and troubled economy, the governments of many nations are rolling out the package to help the people, as well as businesses, glide smoothly in the turbulent situation. In this respect, the NZ government has imposed quarantine measure along with lockdown to keep a check on the growing infection. Meanwhile, necessary steps are also being taken to aid the dwindling economy and support the diminishing trust of the people in the market crunch like situation.

The industrial and associated operations remain shut, and the uncertainty hovers over the cash flow and operating profit of the enterprises. Amidst such a scenario, the business Finance Guarantee scheme of New Zealand is centred at sustaining the cash flow of the business operations. Furthermore, the wage subsidy of $8-12 billion is set to ensure income sustainability for the employees as their employers are caught amidst the turbulent market situation.

To support the failing economy, Reserve Bank of New Zealand (RBNZ) has slashed the cash rate to 0.25% to ensure cash influx in the market. Yet, the thought about the impending growth in the jobless rate has been one of the causes of everyone’s worry. Despite the government’s endeavours, many economists fear that the rate of unemployment may increase in the country in the coming months.

What can you do amidst such a situation?

As the conditions are growing worse with no sign of any vaccine discovery, the panic amidst the people seems to take an upward shooting move. The fear of unknown tends to unnerve the people as they sit pondering on the prospective future scenario. But if history is any proof, then the situation would somehow pass. But the only question that remains is regarding the duration of the outbreak. The past turbulent scenario may have left a temporary dent on the ambience back then, but the human civilisation has emerged stronger and more resilient.

Also Read: Is Coronavirus Gender Biased? Health Tips!

While the world together faces the battle, let us see what you can do on a personal basis amidst such situations.

Do Not Panic- As the uncertainty yet surrounds the situation, the restlessness and worries regarding the future are expected. However, freaking out over the condition on which you do not have any control is not only pointless, but it also can generate health concerns such as depression and anxiety. Moreover, the widespread scare may create sudden supply crunches and other difficulties on a broader level.

Take the Quarantine Seriously-The world grappling with the medical emergency seems to find some solace in the solitude. Due to the epidemic being highly contagious, social distancing measures are implemented around the world to control the pace of the outbreak. Therefore, unless you have an essential and genuine need, stay at home and avoid breaching government rules.

Maintain Hygiene- As coronavirus spreads from contacts, washing hands frequently as well as thoroughly is necessary as it might have encountered the infected objects. Also, the people should avoid touching their nose, eyes and mouth for reducing the chances of Covid-19 affecting them

Seek medical care if having health issues- Fever, cough, and breathing difficulties are some of the significant signs of coronavirus. While the symptoms also represent common flu, it is better to seek medical assistance amidst the current scenario when confronting such symptoms.

Avoid falling for myths- The social media such as Twitter, Facebook appear bombarded by notifications, feeds and post on coronavirus. While you might be using them to sustain through the lockdown, putting your trust on such rumours can be troubling. Utilise the trusted and authentic sources and avoid falling for myths surrounding the coronavirus.

Investment Tips for gliding smooth in Times of Market Volatility

While maintaining the personal safety and ensuring the mind’s peace is necessary, smart and prudent judgements are significant amidst the rocky financial situation. Here are a few investment-related tips that can prevent shelling-off your hard-earned money.

Also Read: Tips for Buying in a Bear Market

Do not rush to sell- As the bearish market trend grows, the craving sell-off and run increases amongst many investors. However, many stocks, especially the risky securities trades at their record low. Selling shares at such time may cause huge infliction to your financial plans.

Avoid making extreme risky investments- While many stocks hit rock bottom, many investors with high-risk appetite consider it as a perfect opportunity to profit from massive price bargains offered by the market. However, as the uncertainty continues in the economy, taking up risky security may generate a loss in future.

Look for sustained dividend stocks- The popular dividend stocks are the shares of the blue-chip companies with financial backup offering consistent dividend with high yield. The strong fundamentals could provide a certain degree of security for your investments.

Consider investment through mutual funds- The diversification helps reduce the risk. However, you would not want to burden yourself with the high cost that comes with diversification. To get diversification benefits, mutual funds are attractive options as besides low-cost diversification; it also offers professionally managed portfolios.


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