The coronavirus outbreak is spreading like wildfire.
The results are nothing short of catastrophic!
Right now, the reported cases of infected people has reached a high of over 75,000. This has resulted in over 2,000 deaths.
The toll is looking grim, already exceeding the SARS epidemic of 2002-2003.
Scientists are frantically working around the clock to develop a vaccine for the coronavirus.
The clear and present danger has taken its toll on the global economy.
Investors are running scared. Businesses are being brought to a halt.
Coronavirus and the impact on the market
This crisis has a truly global dimension.
So far, 29 countries have been affected by the outbreak.
However, the hardest-hit is China. The nation has both the highest number of infected, as well as the largest proportion of deaths.
To rub salt on the wound, this crisis has unfolded over the Chinese New Year season. Entire cities have been locked down for quarantine. Factory production has come to a halt. The economy is at a virtual standstill.
Because China is one of the world’s largest trade exporters, we’re seeing the shockwave from the damage ripple outwards.
Many industries globally — like technology, food, and construction — have suffered. They can’t import the material they need to assist them in the production of their services. Logistically, it’s a nightmare.
Furthermore, international travel has severely impacted. In an attempt to control the spread of the virus, countries around the world have banned travellers from China — disrupting the plans of tourists, students, and businesspeople.
A climate of fear now reigns supreme. Investors have sold off their holdings in speculative stocks, choosing to redirect their funds into safe harbours like gold and silver.
Stock market indexes across the world has see-sawed accordingly.
Could the Coronavirus Cause a Recession?
You might already be wondering: ‘Could this be the start of another recession?’
Opinions are mixed here.
A recession is certainly possible when you consider the amount of travel and trade disruption that has happened. China is currently the second-biggest economy in the world, so they are feeling the heat enormously.
Health services are paralysed by the influx of the sick. Offices and factories are vacant. Businesses are quite literally buckling and being brought to their knees. How long can everyone continue to absorb the financial blows here?
On the other hand, it’s important to note that the Chinese government has taken swift action to intervene in the economy. They have slashed interest rates to lower borrowing costs. They have also injected billions of dollars to keep affected companies afloat.
Health officials are also doing their best to create a vaccine, even as they impose wide-ranging efforts to contain and manage the outbreak.
In China, new hospitals and treatment centres are being rolled out at a rapid pace. And, globally, airports across the world have put stricter guidelines in place when it comes to screening passengers.
Frankly, everything is being done to resolve this crisis — both from a healthcare and economic perspective. Only time will tell what the final measure of success will be.
How You Can Gain the Best Opportunity from This Outbreak
There’s no escaping the fact that businesses are crippled and stock prices have flatlined.
It’s tempting to panic and freeze up. Choose to do nothing at a time like this.
But consider what Warren Buffett has to say about investing in general: ‘Be fearful when others are greedy and greedy when others are fearful.’
A troubled time like this may actually offer more value and opportunity in the long-term. You just have to be prepared to look past the sensationalist headlines and shaky emotions.
For example, we have seen exception growth in some industries. Cryptocurrency has climbed. Stocks based around gold mining has climbed as well.
Black swan events like the coronavirus tend to stoke fears of a recession, which is why some investors turn to cryptocurrency and gold as a safe harbour.
Should you do the same? Should be seeking out a safe harbour as well? What are the advantages? What are the risks?
A website called provides you with a daily free e-letter that keeps you up to date with what is going on in the economy around the globe.
They also provide you with a service called Lifetime Wealth Investor that will give you insightful on a weekly basis.
This premium research will help you secure your financial goals in tough times like these.
So, what are you waiting for? Get started with your journey to financial independence today!
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