2020 Stock Market Crash: Is COVID-19 To Blame?
Years ago, back in 2008, the stock market crashed, and we experienced one of the biggest economic crises, also known as the Great Recession. Everything collapsed quickly, and that left an impact on both the economy and our state of mind. People started to seek a safe port that won’t lead them to bankruptcy again, and this newly-formed situation really put worries into their heads. But can COVID-19 cause a complete crash of the market and cause us immeasurable losses? Well, that depends on the choices we make.
One thing is for sure, we are dealing with a pandemic that is spreading aggressively all over the planet and we are still unable to stop it. Keep in mind that there are no two market crashes that look alike. Therefore, you cannot learn from your previous experience. You must observe each market closely and take time to be extra careful.
In just a few months we found ourselves in the middle of chaos. This is not something we can monitor or avoid, but we can always control our actions. Therefore, before you rush and invest your money in specific stocks, be sure to find someone who will offer you transparent trading and investment services. Once you find someone worth your trust, you will be more secure in your next steps.
Who Suffered the Most
By the end of February, stock markets from around the world experienced enormous drops due to Coronavirus. Within just one week, worldwide markets reported major losses, which meant only one thing — the crisis from 2008 was knocking on our doors again. But, as we already said, there are no two identical crises. Therefore, while some markets suffered huge losses, there are others who experienced positive sides of the lockdown.
At the beginning of the 2020 market crash, it was impossible to predict which markets will experience the biggest financial crisis. The stock market was one big roller coaster that changed from one day to another.
There are two specific days each investor will remember — Black Monday (9 March) and Black Thursday (12 March). Before the opening on Black Monday, the Dow Jones Industrial Average experienced a 1,300-point drop due to the fall in the oil price, and that suspended trading for 15 minutes. By the end of that day, the DJIA lost more than 2000 points. According to The News International, this was the biggest failure in intraday trading.
Also, the same day, The NASDAQ Composite lost over 620 points, while the S&P 500 fell by 7.6%. Three days later, the European Central Bank chose not to cut interest rates. That decision led to a drop in S&P 500 futures of more than 200 points in less than an hour.
And while it looked the stock market was completely crashing, there were specific industries that blossomed during this unfortunate event. Even if you just started familiarizing yourself with market stocks, you cannot deny the huge success Netflix, Zoom Video Communications, and The Clorox Company had during the last three months. PayPal also took advantage of this situation and removed the fees which encouraged people to use their services even more.
On the other hand, we have hotel chains and travel industry that are not in enviable positions. If you are brave enough, you could invest the money into them, regardless of the coronavirus stock market impact. But keep one thing in mind — always look for the companies with minimal debts and strong balance sheets.
What About Cryptocurrencies?
The Crypto market is worth billions, and you can be sure that many currencies have not reached their full potential yet. Of course, due to this market crash, cryptocurrencies also suffered. The good thing is this was not a long term fall, and they are back on the track again.
In a short period, when COVID-19 had an effect on the stock market, Bitcoin has fallen twice as much as the S&P 500. It crashed from $10,367 to just $5,153. Nowadays, it’s approximately $9,681, which means it recovered in less than two months.
Should You Turn the Panic Mode On?
Well, not necessarily. This pandemic really affected some market fields, but it is not the worst stock market crash we experienced. Actually, the Great Depression is still considered the biggest economic downturn we’ve had. So, as long as you are in your safe zone, there is nothing to be worried about. As a matter of fact, if you choose the right trading platform that offers you proper support and full details about the market, your money is more than safe.
