Today, during these trying times, confusion and chaos have taken their heavy toll on mankind, where not a single one of life’s multifaceted dimensions remain untouched. What is being called the novel coronavirus, more commonly known as COVID-19, continues to inflict disorder and disarray around the globe, disrupting the natural flow of things. Since the virus outbreak, stock prices have taken an explosive hit, which experts say is worse than the 2008 crisis. Yet, experts still remain uncertain as to how bad the ramifications are going to be. There are so many different things to take in and can help. 


That being said, here is how the current pandemic is affecting stock prices around the world.

How it started

What had initially started as a medical pandemic, quickly manifested into what is now being called a financial pandemic. Although they are both connected, they are not one, and definitely not the same. In fact, there are many elements to be considered when it comes to this “financial pandemic”, some of which reach back before COVID-19 was declared a pandemic. One major element includes the ongoing oil war between Russia and Saudi Arabia. Due to these events intertwining, oil prices were pushed to their biggest decline in over 30 years, which had inevitably led to stock indexes sinking by more than 7%. This had triggered a temporary halt, recording the worst day for Dow Jones Industrial Average, and Standard & Poor’s 500 index with a drop of 2,000 points, since 2008. But, since the Dow hit a record high only weeks prior, the fall felt more dramatic than it actually is.


Furthermore, amid growing fears, stock prices experienced unprecedented volatility, until finally, and officially, entering a “bear market”. The effects of the drop had echoed throughout every economic avenue, to where even the US government bonds approached 0% interest, which is the lowest ever. 

How the pandemic affects the stock market

Seeing as markets are unable to thrive during times of uncertainty, due to the difficulty in planning for businesses, the global panic does not come as a surprise. This had set a chain reaction, where investors quickly sold their stocks to get their money out of the market. In the span of one week, $5 trillion was wiped from all financial markets across the world. 


The stocks that are taking the biggest hit are oil stocks, which had plummeted since factories started shutting down and the travel ban was enforced, putting a halt of manufacturing and delivery. Nevertheless, other markets are also struggling, even those with newfound popularity, such as the plant-based protein society. One company, in particular, Beyond Meat, has experienced a fall in its initial IPO after recording an all-time high stock price of $240, and you can read what some experts are saying about it's unclear future. Though, you should know that regardless of what industry you may hope to invest in, it is not the time just yet, seeing as market conditions are only getting worse. 


Additionally, given the fact that almost 85% of what the US economy consumes is made in the US, this makes the country less vulnerable to international upheaval. Though, US economic policies are capable of affecting other markets. Furthermore, retirement accounts can be impacted by the current situation, seeing as they are usually invested in the stock market. However, since they are also usually diversified, which is done for times like these, any impact should be minimized, and expected to heal from the current crisis. 


Who benefits

It is true that most companies are suffering amidst the current pandemic. However, according to many sources, some industries are seeing an increase in stock prices, with a few of them exceeding in growth by 20%. These are mainly drug and food retailers, medicine and biotech research, and gas and water companies. Moreover, graphs show that alternative investment instruments are steadily increasing, which speaks to the current financial state of individuals and companies. 


All in all, no one really knows what is going to happen next, since the key reason for the current market volatility is because of uncertainty. However, some markets are slowly healing, while others remain in an indefinite decline. Moreover, most people will barely be affected by the drop in stock prices, since according to statistics, almost 10% of people own around 80% of stocks. 


That being said, unless you are one of the 10% stock owners pool, you don’t have to worry because only the wealthy are truly affected by this abrupt and sudden crash in the stock market. 

And remember, stock markets have survived countless recessions, the most previous being in 2008. With each time the experts are becoming more adept in dealing with them, so it is only a matter of time until stock prices are back on track, and the “bear market” exits and a “bull market” enters. 

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