The Great Paradox: A Huge Price-Tag for Slowing the Virus
ARTICO is fully operational during these turbulent times. Since over three weeks we have switched to home-office mode and remote access works very well for all our tasks. We do regular partner meetings over Skype and keep an optimistic attitude that at some point the current storm will be over. In the meantime, you can reach us via mail or phone anytime. Stay healthy!
- Within a few weeks the world has been turned upside down: Panic resulted in a large sell-off in March with some recovery towards the end of the month
- YTD Global Developed Markets were down 21.1%, Global Small Caps lost 29.3% and Emerging Markets were down 23.6%.
- Only hindsight will tell whether the global lockdown was the right choice to preserve humanity and its medical system or whether the economic, social and humanitarian consequences of this lockdown will unfold as the much more terrible outcome
- Strict quarantine measures seem to mitigate the spreading of the virus. Social distancing, tracing apps and systematic testing pave the way for a termination of the lockdowns. Progress can also be expected from the therapeutic front.
- The post-pandemic world, however, will be one with huge fiscal debt burden and unimaginably inflated central bank balance sheets
- A sharp recession is also inevitable. It is however unclear how fast the recovery will be.
- Valuations look of course attractive, but impact of lockdown is not yet reflected in actual Sales figures.
- Financial Crisis fears will rise due to latent EURO-zone instability and uncertainties surrounding the level of leverage and related credit risks across the system.
- Stay the course of your strategy, re-balance systematically and if you were underinvested in equities, consider a phased approach to build up your risk positions.
- It is more than ever a good strategy to stay invested in fundamentally good companies