BBRG: Five Tips for Recovering From Covid-19 Panic Selling
Five Tips for Recovering From Covid-19 Panic Selling
With stock markets on the rebound, there’s lots of seller’s remorse. Think of it as an opportunity for the next time.
Bloomberg, June 8, 2020
What has happened so far in the markets this year: 2020 began with the novel Covid-19 virus, which originated in Wuhan, China and spread to Europe and the United States. In early January, no one yet knew how contagious it was or how deadly it might become. Late-February, stores were running out of Purell, Lysol, Clorox – and toilet paper. If your society cannot keep TP on the shelves, social unrest is not too far behind.
By March, some people were calling this a pandemic with dire potential consequences. People were uneasy, but no one was quite panicking yet. On March 4th, I was courtside to see the New York Knicks get shellacked by the Utah Jazz. Less than a week later, two Utah Jazz players tested positive for the coronavirus. On March 11th, the NBA announced the suspension of the season.
That decision roused people from their complacency. It spooked the markets, which were already rolling over since late February. The NBA announcement accelerated the selloff. Soon after, sellers were exhausted, and on March 23rd, markets reached their nadir, down 34%.
During February’s collapse into March’s lows, people panicked. You don’t get the fastest 30% drop in history without an emotional spasm. Some sold everything on the way down, at the bottom, or when markets began to recover. Many did so spontaneously, without a plan as to how to proceed if things got better or worse . . .
See full column at Five Tips for Recovering From Covid-19 Panic Selling