Investing In The Time Of COVID-19

Summary:

  • The emergence of the Omicron variant has significantly increased volatility in the market
  • The reaction of the Fed to Omicron is unclear now, taking into account the inflation threat
  • The annual inflation rate in the US surged to 6.2% in October 2021

For more than one year we have been living in a time of global pandemic threat and unprecedented economic support from governments. Each time when we think that we have an effective vaccine again the virus, and we form expectations about living in the post-pandemic time, Corona strikes again jeopardizing our achievements in fighting it and creating chaos in the global economic system. Omicron, which introduced itself last week, is the new variant of COVID-19 (which has a high number of mutations in the virus spike protein). It is still unclear how dangerous the new variant is, but governments have begun to implement security measures to prevent the spread of Omicron to their territories.

(Source: thesun.co.uk)

Today there is a high level of uncertainty in financial markets and we do not have enough information about the new variant to adjust our expectations for the future. But Omicron is not a “Black Swan” event like the one that occurred during the initial COVID-19 breakout, and what is more important is that the world economy has already adapted to the realities of the pandemic and can react quickly to a current situation. While the beginning of COVID-19 in the February of 2020 was something new for us, which we had not seen before in modern history, the Delta variant also, did not as dramatic an impact on the global economy and our everyday life as COVID-19 did when it emerged.  

Between the Coronavirus and Inflation Walls

(Source: stock.adobe.com)

Although the emergence of COVID-19 crashed financial markets in March 2020 and put much of the world economy under lockdown, it also introduced the mega uptrend growth which is continuing today.   

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Disclosure: A period of high volatility and sell-off creates great opportunities in the market. However, at the same time, an investor has to stay calm to correctly analyze a current market ...

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