The Economics of Coronavirus: Thoughts for the INVESTOR

Feb 26, 2020 | Jeremy Goldfarb


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A good read from my team here is attached. It provides excellent perspective on the recent volatility.

 

As an investor, and as an investment advisor my thoughts are as follows. The impact of the virus on global "activity" is undeniable. You have major cities, in the world's second largest economy, that have been effectively shut down and shuttered temporarily. You have major production centers, for major global corporations, who have either slowed down, or halted production in certain locations. You have major consumer retailers that have closed their doors temporarily to stem the spread of the virus. You have major airlines that have canceled thousands of flights (this is on top of the 737MAX grounding remember -- are we even talking about that anymore?)   You have individuals that are afraid to go to work, afraid to board a plane, afraid to board a bus.

 

The temporary slowdown in overall activity, will lead to a temporary slowdown in economic activity, which will shave points off of global GDP. The effects of this on markets are undeniable, however they will be transient, so stay the existing course.

 

Now, opportunities will arise for both traders and investors as markets swoon and recover. Best to identify a list of opportunities you want to capitalize on if you have any interest in trying to "play the dips". Otherwise....trust in your long term strategies and convictions. COVID-19 should not impact those long term.