We need to consider what impact the restriction of human movement and economic shutdowns really has. That’s because it’s pretty likely that again in our lifetime, we’ll have to deal with another pandemic. This isn’t the first one we’ve had to deal with.
As Vern notes, there’s fundamental economic change afoot. How this all shakes out is going to have immediate impact on global industry, but it’s also going to drastically change the future that we thought was coming.
As we’ve been warning, the pain is set to come through unemployment. Which we’re now starting to see. Next step will be recession. Expect that pretty soon when the economy contracts officially. And then there will be corporate failures.
The impact that has on economic output is devastating. And while the markets have just jumped, the real economic pain of all this has not even come close to hitting as it should.
Do you sell up positions you’re still in? Do you sit and wait it out? Do you dump as much into the market as you can? Do you buy gold? Silver? Bitcoin? Stocks? Property?
I remember what it was like in March 2009. That was the bottom of the market from the ‘GFC’. People hated stocks. Everything was going to get far worse according to the sheep brains out there. It was real end-of-days stuff. Now, today, I’m telling you in my view, we sit on the cusp of the same kind of opportunity.
Maybe the coronavirus is part of the acceleration of new disease. After all, we only just got through Zika in 2015–16. There was the Ebola outbreak in 2014. Before that was MERS in 2012. Then H1N1 (swine flu) in 2009. And then there was SARS in 2002 and 2004.
Thanks to the coronavirus, the government is once again looking to take drastic measures. They’re petrified about the impact this pandemic will have on the Aussie economy. And they’re preparing to release a new stimulus package.
The world isn’t ending, but perhaps it’s going to change a little faster thanks to the global COVID-19 pandemic. If it does, there will be companies that will benefit from it. As an investor all you need to do is be ahead of the change and look at what happens when this all fades away...
The ASX is chock-full of great companies. There are companies not only dominating the domestic landscape, but the global landscape too. And they’re always working towards growth. I’d go so far to say there’s not a single company on the ASX that’s just going through the motions.