3 trading days of loses against the major index does not look good on a graph. Was Friday 24th February the start of the crash that bears have been signalling for for as long as the bull market has been a thing? Is Corona going to kill off the equity markets ever increasing success?
Probably not. DevDosh Ltd is here to tell you why.
One of the many great things about the equity markets is that they have been around since the East India Company in the 1600’s and the debt markets have been around even longer. That means for virtually every situation we have a retrospective play book that can provide us with the most likely outcome and allow reflected wisdom to intercede to get better results than last time.
So what happened on Friday 24th? Was it the start of the next financial apocalypse? Well from Friday morning to Tuesday evening the Dow has dropped 1,029 points, the FTSE 100 has dropped 259 points, the Dax has dropped 13,556 points and the Nifty has dropped 111 points. For those that are not familiar with those index’s, if their charts were ski slopes, you wouldn’t be getting off the ski lift.
But why was Friday the day that prices dropped. Reports gained traction that told investors that China’s already disheveled economy was taking a beating. The worlds 2nd largest economy only grew by 6.1% in 2019. China hasn’t put that kind of number out since 1990. But, to be fair, that trade war BS was already priced into the markets. What compiled the pain was that the major noise makers said that Chinas 1st quarter growth this year was going to be between 0%-1%. That kind of pull back can only have 1 effect on company earnings and it’s not good. If the 2nd biggest spender in the village stops going shopping then the retailers will feel it. In this case the investors in the retailers are trying to amputate the limb before they feel the pain.
The fact is when viruses strike consumers disengage from the economy. This won’t be a shock to our regular readers as it was spelled out in a previous blog. (DevDosh Ltd Corona Virus Blog)
So what to do next? Well read the previous blog to inform yourself of the economic overview, follow the trend and buy at the discount. Happy trading 🙂
Of course if all that is to much for you, as it is for most people, contact DevDosh Ltd and let us provide you with the safest 10% yield in today’s fixed income investment market.