Just how far can Covid 19 drive down the markets?
Discussion
The one thing markets hate above all else is uncertainty....and this is obviously a majorly uncertain event. Personally if you are buying because of a long term view over say two or three years and you believe in the fundamental value there is probably a decent buying opportunity but my guess is the market goes lower first. I very much doubt it is going to rally hard from here in the next few days...we’d need a few days of stabilising in numbers of infected people. I think it’s getting to the stage now where a lot of people will start knowing people that are impacted. e.g. One fo the lads my son plays Sunday morning football with is now in quarantine because his Dad went skiing in Northern Italy last week.
Cheib said:
The one thing markets hate above all else is uncertainty....and this is obviously a majorly uncertain event. Personally if you are buying because of a long term view over say two or three years and you believe in the fundamental value there is probably a decent buying opportunity but my guess is the market goes lower first. I very much doubt it is going to rally hard from here in the next few days...we’d need a few days of stabilising in numbers of infected people. I think it’s getting to the stage now where a lot of people will start knowing people that are impacted. e.g. One fo the lads my son plays Sunday morning football with is now in quarantine because his Dad went skiing in Northern Italy last week.
I fear it ( Covid 19) will get much worse before it gets better.A friend of mine with more foresight than me shorted the market last week, but was then mystified that they didn’t go down. He will be doing OK now.
I am tempted to sell, sell, sell (always psychologically tough though if markets have already gone done) in the hope of buying back cheaper later.
I am tempted to sell, sell, sell (always psychologically tough though if markets have already gone done) in the hope of buying back cheaper later.
Cogcog said:
Cheib said:
The one thing markets hate above all else is uncertainty....and this is obviously a majorly uncertain event. Personally if you are buying because of a long term view over say two or three years and you believe in the fundamental value there is probably a decent buying opportunity but my guess is the market goes lower first. I very much doubt it is going to rally hard from here in the next few days...we’d need a few days of stabilising in numbers of infected people. I think it’s getting to the stage now where a lot of people will start knowing people that are impacted. e.g. One fo the lads my son plays Sunday morning football with is now in quarantine because his Dad went skiing in Northern Italy last week.
I fear it ( Covid 19) will get much worse before it gets better.Budflicker said:
Sold everything on the 11th February for this reason, S&S ISA , shares and funds in my SIPP. Glad I did now.
I know these things are long term drip fed investments but this is going to be a s
tstorm for the next 6 months at the very least.
I sold 30% of my SIPP last week, and am now down to 50% as I started selling on the drop. Will keep selling until thee is some good news.I know these things are long term drip fed investments but this is going to be a s
tstorm for the next 6 months at the very least.GOATever said:
It’s nice to see so many people over reacting, and exacerbating the problem 
Why is it an over reaction? If you feel there will be a big change in a stock/fund/the whole market, then why not sell?The amount I've saved (on paper) would buy a new car. All I've done is limit my exposure to what could be a very big drop.
Just stick to your fundamentals in this case.
From Marketwatch:
However, investors have been attuned to updates on the spread of the disease.
Historically, however, Wall Street’s reaction to such epidemics and fast-moving diseases is often short-lived.
According to Dow Jones Market Data, the S&P 500 posted a gain of 14.59% after the first occurrence of SARS back in 2002-03, based on the end of month performance for the index in April, 2003. About 12 months after that point, the broad-market benchmark was up 20.76% (see attached table):
Table available here: https://www.marketwatch.com/story/heres-how-the-st...
SARS resulted in a total of about 8,100 people being sickened during the 2003 outbreak, with 774 people dying, according to data from WHO and the Centers for Disease Control and Prevention.
Separately, the S&P 500 rose 11.66% in the roughly six months following reports of the 2006 Avian flu virus — a fast-moving pathogen also known as H5N1. The market gained 18.36% in the following 12-month period.
To sum up ... be a lot cooler if people in China would stop eating bats and snakes...
From Marketwatch:
However, investors have been attuned to updates on the spread of the disease.
Historically, however, Wall Street’s reaction to such epidemics and fast-moving diseases is often short-lived.
According to Dow Jones Market Data, the S&P 500 posted a gain of 14.59% after the first occurrence of SARS back in 2002-03, based on the end of month performance for the index in April, 2003. About 12 months after that point, the broad-market benchmark was up 20.76% (see attached table):
Table available here: https://www.marketwatch.com/story/heres-how-the-st...
SARS resulted in a total of about 8,100 people being sickened during the 2003 outbreak, with 774 people dying, according to data from WHO and the Centers for Disease Control and Prevention.
Separately, the S&P 500 rose 11.66% in the roughly six months following reports of the 2006 Avian flu virus — a fast-moving pathogen also known as H5N1. The market gained 18.36% in the following 12-month period.
To sum up ... be a lot cooler if people in China would stop eating bats and snakes...
I’m not one for over reaction but comparing this to SARS isn’t a great one. The spread of SARS was nothing compared to Covid 19 in terms of the amount of people infected or mortality. More importantly as far as the topic of this thread China was nowhere near such a major part of the world’s economy and from my recollection SARS didn’t have the impact we’re starting to see on daily life or on commerce. Geneva Motor Show cancelled this morning, professional football matches played behind closed doors, schools shut etc etc SARS didn’t get anywhere close to that impact in Western Europe..
One difference between this on and the last is the 14 day incubation period rather than the 2/3 days. That makes it much more contagious.
They real issue is the impact on retail shopping which is what keeps the world moving and the debt covered. Concerns over markets incurring significant drops in consumers shopping for fun is the issue. It doesn’t really matter how dangerous the virus is it just needs to keep enough shoppers at home and not out and about renting new cars, sofas, holidays and all the non essential goods that the modern global economy is built on. If you look at China the shops are empty in lots of places, footfall has fallen off a cliff. Potentially each continent outside of Antarctica is at risk of going through this phase and the subsequent knock on effects to business.
For example, in Europe you probably already have a significant slowdown in consumers booking summer holidays and the next step is likely to be a decline in general retail if people decide to start staying at home, starting with destinations where large crowds gather etc.
Sell pop stars, buy you tubers.
They real issue is the impact on retail shopping which is what keeps the world moving and the debt covered. Concerns over markets incurring significant drops in consumers shopping for fun is the issue. It doesn’t really matter how dangerous the virus is it just needs to keep enough shoppers at home and not out and about renting new cars, sofas, holidays and all the non essential goods that the modern global economy is built on. If you look at China the shops are empty in lots of places, footfall has fallen off a cliff. Potentially each continent outside of Antarctica is at risk of going through this phase and the subsequent knock on effects to business.
For example, in Europe you probably already have a significant slowdown in consumers booking summer holidays and the next step is likely to be a decline in general retail if people decide to start staying at home, starting with destinations where large crowds gather etc.
Sell pop stars, buy you tubers.
I bailed out this morning around 9% down. Pretty painful as it’s a big hit but I don’t see where any positive news comes from over the next few weeks and the yanks will freak out when it spreads there.
Thought I was being pretty conservative with a 60/40 life strategy but seeing high 5 figures disappear every day tests the resolve.
Not sure where to go with investment from here as feel like I need to do something but even with a global index tracker there is more risk than I want to take. It’s amazing how correlated global markets are nowadays.
Pretty sure this will be the signal for it all to turn around now so good luck everyone.
Thought I was being pretty conservative with a 60/40 life strategy but seeing high 5 figures disappear every day tests the resolve.
Not sure where to go with investment from here as feel like I need to do something but even with a global index tracker there is more risk than I want to take. It’s amazing how correlated global markets are nowadays.
Pretty sure this will be the signal for it all to turn around now so good luck everyone.
All seems an over-reaction to me. Airports/airlines pretty normal, people going about their usual business, lights still on and world still spinning.
Very much fear driving the market.
However, in answer to the title of the thread, if it was to cause the end of the world as we know it, then 0 is possible.
Very much fear driving the market.
However, in answer to the title of the thread, if it was to cause the end of the world as we know it, then 0 is possible.
Cogcog said:
I had sat on the proceeds of a house sale since Octobr waiting to see what happened with Brexit. Between COvid-19, Btexit and the Eurozone loking shaky I may just spend it on coke and hookers.
Assuming coke is still being important and the hookers aren’t dead. As part of an overall plan to start migrating a large amount of cash into the markets this event doesn’t really matter if you are going to do the logical thing and stage your entry over regular investment periods such as £10k/month etc. I would say that right now you are in a good position so long as your cash is spread among more than one bank and under £85k in each!!!
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