We are witnessing a real panic selling on all the world stock exchanges, caused by the infamous and undervalued Corona Virus.
I proceed in chronological order, the Coronavirus started from China, from Wuhan and its surroundings , there are those who say that it was the animals that transmitted it to man, but honestly I have strong doubts, I believe the second option in fact someone claimed that close to the fish market Wuhan had a laboratory and the virus had come out of there (perhaps a test tube or a worker who clumsily became infected).
The fact is, from China arrived in Italy (home now of many Chinese who for work reasons came to live in the Belpaese and Italian workers who emigrated to the Rising Sun) ; more precisely to Codogno in Lombardy, here is where the “hotbed” that is starting spreading like wildfire on our territory with the increase of infected people. I am not arguing about the management of Covid 19 by the Italian and world authorities, but I want to focus financially on the tsunami that is hitting the world stock exchanges as at the time of the 2008 crash.
Until a few weeks ago the stock market continued to rise, just see the records of
Wall Street Index, but in 6/7 sessions it created a real “panic selling” losing more than 10% compared to the highs (last week Ftse Mib -11.26%, Cac 40 -12.5% Dax -13% S&P 500 – 13.4%) while the Vix fear index has skyrocketed, I always remind my users who write to monitor it always not only when there are “crash” situations (I often use it when I cover my wallets with options). What are the ECB and the Fed going to do? It is hoped that they will support with important measures this moment caused by Coronavirus, also because GDP, which struggles in the last to grow, is likely to have a negative sign with a greater danger for all manufacturers, which would find themselves in various respects (debts to banks to name a few) in difficult conditions.
I think this “panic selling” from one week to the next is a little too violent, it reminds me of the collapse of the 2000s more than the financial crisis of 2008 at the time of Lehman Brothers, it seems to me that behind this bear market there are no computer algorithms but there is a general repositioning done by humans.
Panic selling and so where to invest? In the meantime, don’t be afraid, it’s true that many are losing money, but selling without looking at the short-to-medium-long-term time orientation is a mistake that happens to many investors.
Advice to invest in the safe haven like gold that since January 2020 has put on a 4.2% (22% in 1 year), the precious metal as well as protecting the portfolio from market collapses is a great additive against inflation , finally, I like Treasury Bonds The Swiss franc and the Japanese yen, as well as simple deposit accounts that under 100000 euros are guaranteed (in Italy).