It is not a secret that the coronavirus pandemic created a lot of problems for the stock market. For example, the stock performance of the largest public companies in the U.S. fell 34% between 35% between mid-February and March 23 according to the S&P 500. The coronavirus pandemic affected investor sentiment. Furthermore, it was the fastest decline of its kind in history.
Nevertheless, it was followed by the best 50-day rally in the history of the S&P 500.
The stock market seemingly defied numerous negative information regarding the economy. Moreover, during that period millions of people from New York to Los Angeles lost their jobs.
Additionally, people should keep in mind how stock investors get higher rewards compared to people who prefer bonds and cash. The answer is a greater risk.
Stocks investors and risk factors
It is worth mentioning that, giving up the stock market for cash could cost investors in the long run.
Several factors could affect the market such as the second wave of infections. It makes sense as states may have to reimpose strict social-distancing rules.
Furthermore, if U.S. Congress doesn’t pass additional stimulus packages, this could also affect the market. Moreover, the next selloff most likely will come from some unpredictable event, but panicking is not the best option. Stock investors should as investors rather than speculators.
Unfortunately, millions of Americans lost their jobs in the last couple of months. Furthermore, companies across the country are struggling to cope with the ongoing situation. Moreover, the stock market has defied gravity in recent weeks. Interestingly, in recent weeks market rebounded nearly as quickly as it sold off amid the coronavirus pandemic.
Last but not least, stock investors should keep in mind that panicking and getting rid of their stocks could cost them a lot of money.
COMMENTS