5 years ago
Was “let’s sell for now and wait for the dust to settle”, one of your mantras during the recent market shock? There are some common mistakes made during a crisis. Sometimes they come down to individual decisions. Often, they are as simple as financial advice gone wrong. Here are my top five common blunders that investors may encounter during a crisis. Mistake 1: “Let’s sell for now and wait for the dust to settle.” The equivalent for cash-rich investors would be “Let’s keep the cash and wait for the dust to settle”. The key S&P500 benchmark on Wall Street, widely considered an indicator of global market sentiment, has rebounded by more than 60 per cent since its low on March 23, 2020 and most investors that have not bought are still in waiting mode. An alternative view Instead of waiting, it is much better to build a solid exposure structured around well-defined investment themes, such as the US market and China. Potential winning infrastructure sectors might include IT & Communications, Healthcare, and Industrials. Other attractive opportunities may also be found within the Consumer Discretionary and Consumer Staples spaces. (Consumer Discretionary stocks represent companies producing non-essential goods and services. Consumers tend […]
5 years ago
Patrik Lang, Head of Equity Research and Strategy, Bank Julius Baer In March, within a few weeks, the outbreak of the coronavirus led to an unprecedented sell-off on global equity markets, with the S&P 500 dropping 35%. From mid-March onwards, the S&P 500 started an equally spectacular rally, with the S&P 500 gaining almost 50% within less than three months. This came as a surprise to many analysts as fear of a second wave of infection are widespread. In addition to this, many economists only expect an anemic recovery. Equity markets – what to expect Against this backdrop, many investors are anticipating a second market crash. In our view, a major correction is rather unlikely because the economic recovery has already begun and a second wave of infection is unlikely to lead to a general lockdown because most countries will be better prepared for the second wave than they had been for the first one. Countries like Taiwan and South Korea have proven that testing and tracing is a much more efficient way to deal with the pandemic than locking down entire economies. It can be assumed that most countries will follow this example at least as long as no […]
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