It is still not clear how dangerous the coronavirus really is for those it infects. But one thing is already sure: the impending epidemic is shaking up the economy and financial markets.
You may think that now is not the right time to think about investing. However, we think that now, which is a time when many people act rashly and in panic, is exactly the right time. Last Monday saw the biggest worldwide stock market losses in decades – triggered not only by the spreading epidemic but also by falling oil prices. It is now obvious that this “corona crisis” will have tangible economic consequences. What these will ultimately look like, however, is not yet clear.
“The Markets” Don’t Like Uncertainty
It is therefore probably not bad advice to remain calm and think. Each of us has already personally experienced the first impacts the crisis, whether on the job or in the supermarket. But these cannot be the sole cause of the crash. Sales are driven by panic, which is an emotion that does not generally trigger rational behavior. Take look at the supermarket around the corner: do you think it makes sense for people to stock up on toilet paper for the next six months? Well, if everybody behaved like that, it could!
If you want to invest your money – and we are not talking about speculation here – you should think about the direction in which the world will turn in three or five years. Not only only today, but over the long term. Today we can probably say: a little more distance sharpens your view of things, even when it comes to evaluating uncertainty.
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