Coronavirus: Lessons for Investors from SARS
As the global population engages in mass hysteria over the COVID-19 pandemic, we forget that a similar outbreak was experienced some 17 years ago.
SARS had a record of affecting 8,000 people worldwide, with 800 fatalities resulting from it. It was a severe acute respiratory syndrome (SARS) that originated in China. Even then, the Chinese government was scorned for failing to take proactive measures to contain the virus.
The current COVID-19 has long surpassed the record set by SARS and continues to spread like wildfire. This alerts private investors to evaluate their next course of action.
Since the origin country of Coronavirus holds a 19.72percent share in the global GDP, the casualties in the region have had a catastrophic effect on the global economy. In light of the economic impact caused by this outbreak, investors are looking for lessons from the 2003 event.
How did the financial markets react at the time of SARS?
The SARS virus broke out in November 2002 and stretched to the next year. It wasn’t until March 2003 that financial markets started to show signs of damage. After the World Health Organization (WHO) issued a health emergency, the value of Hong Kong equities fell noticeably.
But the government of Hong Kong announced a relief package worth USD 1.5 billion to revive the local economy. This turned the performance of the equity market around for Hong Kong and its equities continued to outperform global counterparts for some time.
Markets revived relatively soon
As noticed during the times of SARS, the equity markets reacted radically to the outbreak. But in the long-run, the profitability of companies remained unaffected.
A point to note here is that the relief package was the savior stimulant that boosted the Hong Kong economy. The economy today is in need of government intervention to revive the economy and financial activity.
Investments for undoing economic damage
Even though the efforts of the government are expected to pull the economy out of the abyss, investments should assist recovery too. The economic impact of pandemics is triggered through multiple channels. This comprises of short-run fiscal shocks as well as long-term effects on economic growth.
However, to bring the global economy to perform at par with past standards, there’s a dire need for investment. It’s only through consistent investments that the affected regions can be brought back on track.
This is why it’s crucial that citizens look for opportunities to diversify their investment portfolios and invest in lucrative options. Precious metal IRAs are an excellent opportunity to do this.
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