We are experiencing a few days of great economic and especially stock market uncertainty due to the outbreak and spread of the Coronavirus epidemic that started in China, known as COVID-19.
19. This global pandemic has revolutionized the entire world map and has given way, after 10 years of bullish growth in the markets and with excessively low volatility, at a time of high volatility and drastic falls in the main world records.
The arrival of this global virus, together with the previous economic situation, has caused large stock market declines, in many cases over 30%, which have caused the entry into a stage of an economic slowdown.
We consider that, although this virus is more serious than everyone thought, the market declines are also partly motivated by the situation of unwarranted complacency that we lived before the epidemic and that they have disguised themselves as coronaviruses to further aggravate if It fits, the strong declines that we have seen these days.
However, little by little, and in an increasingly accentuated way, we are witnessing the taking of measures by both governments and central banks to inject stimuli into the economy and thus curb the consequences of this crisis.
Given these events, what should we do?
First of all, we must transmit a clear message of calm and serenity. Both calm and temperance, in current circumstances, are essential to face the future without the risk of making mistakes that we regret.
In exceptional situations like this, we have to avoid upsetting because of feelings, since the panic of suffering further falls can lead us to make mistakes that will mean losing even more money.
As we always say, you should not sell when the market falls, but when the market rises. This phrase is as simple as it is difficult to fulfill. Therefore, we encourage you to go to your financial advisors and put yourself in their expert hands. It is important to remember that in moments of great falls, it is when, with prudence, we must be taking positions in those securities or funds that we see are most appropriate for our risk profile.
Both calm and temperance, in current circumstances, are essential to face the future without the risk of making mistakes that we regret.
We must see market declines, within the prudence that we mentioned before, as clear opportunities to invest in the stock market, with the aim of gradually increasing our positions in companies that have good long-term visibility.
Personally, and so we recommend it, we believe that the best way to articulate these investments is through investment funds, in which we put our money in the hands of an expert so that he invests in the best companies and those with greater potential. With this, we achieve greater diversification, fundamental in these moments of volatility, and at the same time a greater knowledge of the companies in which we invest.
We maintain, and even more so in these circumstances, our traditional philosophy of investing in the long term and never making repayments in times of panic. Time has shown us that it is the best way to invest and obtain positive returns.
The investor should never be a speculator, and even less in volatile markets, therefore we must fully recommend an investment based on our idea of SLOW FINANCE, which is a constructive way of understanding finances and investment, guided by serenity, good judgment and away from the rush, speed or feeling.
This attitude is the only one that allows us to avoid the whirlwind of market information and the one that makes us overcome adverse situations, turning these stock market crises into investment opportunities.