In this article I will talk about what happened in 7 days with the emergency created by coronavirus, from a political and economic point of view.
I leave immediately with the President of the ECB Christine Lagarde, when during the meeting in Brussels she spoke inappropriately (gaffe), textual words on 12 March : “we are not here to decrease the spreads”, stressing that this is not the main role of the European Central Bank. I remember that the spread is the difference between two rates, it is calculated in basis points and serves to measure investor confidence in the assets of the chosen country, the spread refers exclusively to the German Bund since it is the most influential country in Europe.
But how can you say these things Christine Lagarde? But isn’t there anyone on your team helping you prepare a speech? Go in front of journalists, televisions all over the world saying these words, when the world is struggling with coronavirus and so many people are dying. I don’t want to get into controversy, thankfully it’s corrected and chief economist Philip Lane, reassured that given the European coronavirus emergency, there will be billions of additional liquidity for banks, subsidised rates and quantitative easing purchases for EUR 120 billion through 2020.
Fortunately money comes, also because infections with the spread of coronavirus will increase exponentially throughout Europe and the world , hospitals unfortunately will be in a little while collapse and if we don’t help eachother , the disaster will be bigger than expected.
From an economic point of view the stock exchanges have sunk on average (apart from a few rebounds here and there) between 20% and 35% , people in addition to the coronavirus, are concerned by those who manage their money as banks, funds and asset managers, who at these times have more pressure than ever. As I have been saying for years, the biggest “handicap” in managed savings is time. Will they have put the stop losses? Will the funds be covered with the options? Are they buying at such low prices? And you savers, i imagine very concerned between the emergency from coronavirus and seeing your investments sinking.
What I can tell you, do not panic (I know it is difficult but the skill of a manager is seen even in times of emergency), sometimes investors buy at the wrong time when prices are high while the work to be done is the opposite, buy when others sell. I know it’s not easy for anyone, someone who manages his heritage writes to me… but if it keeps coming down? I reply here:
1.Stop loss 2.When it is necessary to mediate the price 3.Shopping in sales periods like this
Personally I am opening several positions (although the price will go up/down in the coming months), on companies such as telecommunications, insurance and technology. Don’t be unprepared.