The Covid-19 virus shock triggered one of the fastest and sharpest market corrections in history, with global stock markets sinking about 30% in a matter of weeks.
Wall Street's "fear index" (VIX) at one point, surged to a record close of 82.69, exceeding the previous peak of 80.86 reached on 20 November 2008 (during GFC). This extreme, unprecedented volatility could be reflective that the markets are anticipating a global recession and the risks of a potential economic crisis have increased.
Recent data suggest that as segments of the global economy are synchronously shut down, the global recession might be a very deep one. The US, Canada and other European countries have reported a spike in claims for unemployment benefits.
Meanwhile, the daily number of confirmed Covid-19 cases continue to rise globally. How successful will the "circuit-breaker" policies be, in bringing the global pandemic under control? There are also concerns of a second wave of imported cases.
Is this a buying opportunity?
Savvy and experienced investors do not let a bear market go to waste and will certainly view this as a wonderful opportunity to buy quality businesses (shares in companies) at cheaper valuations during this virus induced sell-off.
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