Crash or Dent: should How you react now on the exchange

put a Minus four per cent, the Dax-30 , minus 3.4 percent, the S&P 500, even minus 5.4 percent of the Italian index FTSE MIB and 3.7 percent while South Korean

Crash or Dent: should How you react now on the exchange

put a Minus four per cent, the Dax-30 , minus 3.4 percent, the S&P 500, even minus 5.4 percent of the Italian index FTSE MIB and 3.7 percent while South Korean KOSPI Index, the stock markets worldwide on Monday deep in the red. Reason for this new Coronavirus are cases, particularly in South Korea and Italy. In the former country, the number of Infected rose to 602, in Italy there are 76.

The spread of the disease worldwide is still at a low level, the small herd outside of China naught but hope that the epidemic was already defeated as well as. Accordingly, the shares will lose, especially in the value of, the suffered with the outbreak in China in January.

Out of stocks and into safe investments

This applies, for example, Airlines that would be affected by travel restrictions, and luxury goods manufacturer, whose products are hardly in demand when people can't leave their home. According to the Lufthansa recorded, for example, a one-day decline of 8.8 percent, the Italian eyewear giant Essilor Luxottica, it was 6.7 percent.

this wave of selling by professional investors is Triggered. You squint is always to optimize your gains in the short term and will move, therefore, large sums of money in short periods of time in the form of shares and forms of investment, of which they promise in the short term the most. In the current case, for example, means: get Out of stocks and into safer investments such as Gold, government bonds and currencies like the Swiss franc.

The gold price rose from Friday until Monday at noon to 2.7 per cent, has lost since then, but almost all of the gains. The yields on German and us government bonds fell due to a wave of buying yesterday, clearly. The Swiss franc rose yesterday for a short time to its maximum level against the Euro for four and a half years, but subsequently fell off again sharply.

The decline is just short-term

This shows that the development is sustainable. On Tuesday morning, the South Korean KOSPI was again 0.7 per cent Plus. The "safe harbors" have lost their Monday gains for the most part.

For small investors does not mean to panic. A wisdom that is always the case, if current events shake the stock market world. Finally, for the pension imaginary stock portfolio should consist mainly of long-term growth values that survive even minor crises, such as a Coronavirus epidemic.

And the signs of the disease could lead to a global, sustainable stock market crash, are still very low. "All of the epidemics this year, thousands of were contained before they could have a significant impact on the world economy," says Ed Yardeni, chief of the house of analysis Yardeni Research, compared to the website Marketwatch. Including the Sars epidemic in 2003 and the Ebola epidemic of 2014 are about to fall. Both diseases were less Infected in the world, but are significantly more deadly than the Coronavirus.

Why the stock market

That the stock market reacts so strongly to the current epidemic, reacts so violently is due to the fact that the world's stock markets last very well. The S&P 500 had about places in the middle of December, a few weeks before the outbreak of the Coronavirus in China, the first new record highs, the Dax in the past week as high as ever.

to be realized In such periods, stock exchanges are particularly vulnerable to bad news, which may trigger a correction in the stock markets because investors will take a bad Omen then for occasion, your share of profits through sales.

What you can do now

you can do That now, theoretically, if you want to. You could use the little crisis for your Portfolio thoroughly to Shine through. Votes about the fundamentals of your stock yet? The corporations behind a good work, even if your course is yesterday fallen, perhaps, strong?

The Worst thing you could do now would be to panic: "Who is not able to withstand the movements of the stock market because of the current uncertainty, although the courses are near their record highs, it will never hold if the markets are to be made once, really," says Ben Carlson, a Director at Ritholtz Wealth Management, in a column for the website Fortune, "investment decisions on the basis of news is rarely the right decision."

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Date Of Update: 25 February 2020, 10:00
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