Christopher ZeniosBy acknowledging market current events, economic statistics and getting to grips with the current state of affairs you can begin to understand that the market can go in any direction. No one really knows what will happen with markets in 6 months to a year, nor if markets will actually be better later than that but one thing is certain, long term investors are better off not guessing short-term movements.
We don’t usually see things coming like natural disasters, wars or even global health risks like we have today. No one can predict situations like the novel Coronavirus outbreak even if they tried. The fact of the matter is these things cannot be modelled, but they happen and affect us more often than we like to remember.
Cases of Headline Stories
There are many examples we could use that illustrate the type of frightening events that can affect investors and markets in general. Let’s remind a few:
The earthquake that shook all of Asia in 2011, had a magnitude of 9.1 on the Richter scale and created a subsequent tsunami in Japan with 30-foot waves that damaged several nuclear reactors in the area which caused a nuclear meltdown. The death toll reached around 20,000 people and 2,500 are missing.
In 2014, the Ebola outbreak was recorded as one of the largest Ebola virus epidemics in history which led to 28,616 confirmed cases and 11,310 deaths in Liberia, Guinea and Sierra Leone. It was a worrying period for everyone on the planet.
In 2020, we are all faced with another epidemic similar to that of the aforementioned virus. The novel Coronavirus outbreak which is spreading internationally has become the talk of the new year. Since this new virus was first discovered in Wuhan, China, there were more than 24,530 individuals tested positive and close to 493 dead in total in every continent. It’s clear to see directly below the geographical distribution of this virus globally and without a doubt is extremely worrying.
The image shows the current state of events in regards to the Coronavirus.
In the 21st century, we’ve seen Nuclear meltdowns, military confrontations on a global scale, SARs, MERS, Swine Flu, Bird Flu, Ebola, Zika and 2019-nCov virus outbreaks. All these have caused fear and our reaction to this fear is panic and escape which is something that’s served mankind for thousands of years, but ultimately, it’s counterproductive to long-term investing.
Reports show that the Chinese economy and markets have experienced a slowdown due to the most recent virus. The exogenous epidemic was not on investors 2020 market prediction surely, which makes it all more difficult to deal with.
All that can be done is to help fight this virus until a vaccine is developed to kill it or contain it for the safety of the public. How? Remain hygienic, if you have flu-like symptoms try and stay home.
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