The Corona crisis caused stock indices around the world to plummet more than almost any event before. On average, stock markets fell by 30 percent in just a few weeks. And the economy is not doing well either because of the drastic measures. Leading institutes are forecasting a slump worse than during the financial crisis. So what to do with the block of shares?
Buy or sell – that’s what many investors are asking themselves these days. Will the crisis soon be over and will the economy recover quickly? Or do I lose everything if I leave my money invested in stocks? Although every crisis is different and situations cannot be compared, experts nevertheless recognize patterns in which stock markets process events. Therefore, many do not believe that the Corona crisis will stop the long-term upward trend in the stock market. In fact, the U.S. equity market, which has set the tone worldwide, has remained intact so far. Of course, there are no certainties, but Petra Ahrens of MAIESTAS Vermögensmanagement AG in Cologne believes it is likely that the long-term upward trend will continue. The markets could recover more quickly than generally assumed. Long-term bull markets, characterized by ever higher lows and highs, usually last about 25 years. Since the last bear market ended in the financial crisis nine years ago, things have been looking up. According to the calculations, we still have a few years of bull market ahead of us.
Only a stopover
However, not only trends and statistics, but also moderate valuations suggest that the long-term upswing will not end with the Corona crisis, but will merely be a stopover. Experts therefore advise not to simply throw shares out of the portfolio, but to wait and see. New entrants are advised to split investments into multiple tranches to build equity exposure into the rising market.
Source: “What investors should do now. Corona crash: The swan song of the equity bull market is seduced”, 25.04.2020, A&W Online
InFo NEUROLOGY & PSYCHIATRY 2020; 18(3): 48 (published 6.5.20, ahead of print).
