Investors and market experts alike were expecting the worst when the COVID-19 pandemic began spreading throughout the world. Flashbacks of the 2008-2009 financial crisis entered the minds of many people and the market volatility they had to deal with during that time. Interest rates and the market, in general, got very volatile and dropped significantly at the start of the pandemic, but have rebounded nicely due to quick and decisive action by policymakers, among other factors. The market may end up still getting worse before it gets better, but humanity is resilient and will help the world get through the pandemic one step at a time.
Policymakers Could Prevent A Major Recession
One of the biggest pieces of criticism from the 2008-2009 global financial crisis was that policymakers did not act quickly enough to prevent severe market volatility. Leaders in some countries have handled this reaction better than others, and those tend to have more positive outlooks when it comes to preventing a major recession. During these times, any sort of growth in the market would just be a bonus. Policymakers and government officials are largely in agreement that their main focus right now is to prevent major disasters and recover funds later on once the pandemic is over.
The Market May Get Worse Before Getting Better
Even with the proactive steps taken throughout the world, we could still be staring at the largest economic collapse in about a century. Investors need to understand interest rates will not be favorable in the short-term, but that doesn’t mean they have to abandon their long-term plans. Markets will likely get worse before they get better. However, there are plenty of reasons to believe they will get better as the coronavirus weakens, herd immunity takes over or a vaccine is developed. As difficult as it may be, sometimes the best investment strategy is to stay the course and avoid making emotional decisions with your investments.
Looking Forward Will Get Us Through COVID-19
As COVID-19 began impacting the world earlier this year, the downsides of the markets looked much more realistic than the upsides. However, the more we look forward to several months from now, the easier we will be able to put the pandemic behind us. No one should expect a sharp rebound in global economies, though. It begins by focusing on early-stage recovery and following global trends closely. Even the expected second wave of the spread of COVID-19 may not be nearly as significant as the first wave since we are now equipped and prepared to handle it better.
Stock Investing Info provides financial knowledge to investors of various levels. Whether you’ve just begun investing or have an extensive portfolio, we can help by watching market trends and projections and providing solid advice specifically for you. The COVID-19 pandemic has been nothing short of unprecedented, but our experts have been here for our investors every step of the way. Be sure to contact us if you have any questions or concerns about your investments.