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The Great COVID-19 Crisis, where is the bottom?

18 March, 2020

By Spencer Korb

Since the news broke that the Covid-19 coronavirus had spread substantially outside China to Europe and the United States, we have witnessed the mass destruction of wealth globally.


One does wonder where the bottom is.


If you want a good example, the CBOE Volatility Index, or VIX, which measures volatility in financial markets, spiked to 82.69% and is hovering around 80% – these levels were last seen in the financial crisis of 2007/08.


A lot of people have not yet lived through a financial crisis. For them this is a new paradigm. It may be that for all of us.


How devastating the financial impact of the Covid-19 coronavirus pandemic actually will be depends on how quickly the global spread can be contained, and how long it will take for economic activity to return to normality. Until then this will be a wild ride.


Once we have corralled the virus, however, we should make a recovery in financial markets around the world. This could take longer than most think, but one thing is certain, if you look through the cycle, this might be the greatest opportunity for wealth creation in the last 12 years.


In the meantime, it’s best not to panic and to remember that a recovery will come. Focus on the long-term outcome.

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