Market amid Coronavirus: When Investing in Times of Crisis, Think Long-Term

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by Teuta Franjkovic · 4 min read
Market amid Coronavirus: When Investing in Times of Crisis, Think Long-Term
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There is nothing so far to suggest that there will be a permanent impact on businesses, or that earnings will not eventually recover. But when you want to invest during the crisis, you need to think about long-term benefits.

As coronavirus is spreading at an incredibly fast pace, people all over the world are watching eventual developments in the markets to find stocks for investing. However, it is important to stress that making an investment just because the markets are down and/or you are panicking about your future – Is a big no-no.

And it is true, markets throughout the world weren’t really optimistic last few weeks. Cases of COVID-19 infected people are getting bigger and bigger every day. Only in the U.S., over 1,000 people have been infected with hotspots like Washington state, New York, and northern California.

In Europe, Italy’s Department of Civil Protection said yesterday that 977 new cases of coronavirus infections have been confirmed in the last 24 hours, bringing the total up to 10,149.

However, it seems that places, where all have started, began to contaminate this disease.

New China Cases Lowered to 29

China reported only 29 new cases in the country today that represents a great fall for a country that experienced a huge explosion of cases just a little over a month ago. Since late December, China has reported 80,000 cases, with 67,000 in Hubei province, home of the city of Wuhan.

The recent fall in numbers are looking great (no matter how strange it may sound). The Chines government obviously did the right thing when putting Wuhan in place in late January. 11 of 14 temporary hospitals in this city are now closed and even Chinese President Xi Jinping visited yesterday, the first time after the virus erupted.

Mark Matthews, head of research Asia at Bank Julius Baer said he always felt that the number one signal for the Chinese government having enough confidence to declare this as the end would be when President Xi goes to Wuhan. Probably the rest of the citizens got this, so needed, hope as well with the government claiming to successfully handle the virus spread.

Chinese Economy Is Getting Back to Normal

Furthermore, several leading Chinese companies are reporting that they’re getting back to normal operations. E-commerce giant Alibaba Group Holding Ltd (NYSE: BABA) employees are back to work in full number in its package-delivery unit Cainiao and food delivery unit

Alibaba’s competitor reported a strong quarter with estimation it would grow sales “at least” 10% year over year in the first quarter. This is remarkable if we’re aware that during this quarter, most of the country was on an extended holiday and a major city was completely locked down.

Tech giant Apple also reported it has reopened 38 of its 42 Apple Inc (NASDAQ: AAPL) stores in China, up from 29 on February 24 and zero on February 9, when Apple shut down all of its stores. Also, Apple said its production in China is back to 50% capacity and should be at full capacity by the end of the month.

Investing amid Coronavirus

China has been a major mover of global growth ever since the financial crisis of 2008. And to be true, numerous tech companies as Apple is dependent on China.

The fact that there is a fall in the number of newly infected in Asian countries gives a sort of hope for newly affected countries that there is a possibility to tame the spread as well. When it come s to buying stock, it is recommended to think of it long-term. So, a no-no for the airline, cruise line or oil stocks because it is still not known how this situation is going to affect them. However, buying stocks from the companies that advised working-from-home as are Inc (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT) or Alphabet Inc (NASDAQ: GOOGL) – can be really beneficial in the longer term.

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