Friday, March 13, 2020

Will stock market jump after coronavirus crisis?

Good news I would say. If we look to China stock market, even though they drop around 15%, less than European or American markets, they were able to recover from the dump in less than a month, even though they were battling meanwhile with the virus since end december.

So, we could have them as reference, and the future does not seem so critical and dramatic. The dump on European market are more closer to 30% and in US around 25%, but all countries finally have decided to apply same measures as China did, so, we are in the correct path I would say.

Europe and US are controlling people`s free movements to avoid the expansion of the virus and in the same time are using fiscal policies to protect market as much as possible. Even though, it is known that there will be some decline in the production for a while, until all goes to normal. China finally was able to contain  the virus expansion so it is not the end of the world and we have something else on our advantage, the hotter weather is closer than the first time that the virus started in China. So, it could be easier for us to recover.

So, I would say that even though it is hard to decide, it could be a good moment to take some positions on stocks and buy as there are 25% in discount, of course, it will not be a right path to glory, but if you are a medium to large time investor, is not a madness to invest in this moment.