The stock market provided investors with some much needed respite last week after the Dow Jones industrial average recorded its most significant weekly gains since 1938. Buoyed by the prospect of the Senate’s $2 trillion coronavirus stimulus package, the Dow Jones posted gains of 12.8% for the week, while the S&P 500 rose by 10.3%, its best weekly gain since 2009.
For concerned investors and pension savers who have seen their nest eggs slump in value since the reality of the global coronavirus pandemic dawned upon the markets, this is undoubtedly welcome news. It may even have inspired some optimistic investors to consider seeking out the best online stock trading platforms, as they look to take advantage of what they will view as buying opportunities in the markets.
However, as Forbes points out, even after last week’s upturn in fortunes, both stock markets remained more than 20% down on the record highs that they had been posting in February. And even though the gains have so far continued into this week, it seems highly unlikely that a definitive corner will have been turned just yet, particularly given the warnings that the worst of the pandemic is yet to come.
Indeed, experts suggest that the economic fallout from the coronavirus is likely to continue to rattle markets for the foreseeable future. Companies do not yet know how deeply the crisis will affect their profits, while the wider economy has little in the way of hard evidence to quantify the impact just yet, besides knowing that most indicators will currently be deteriorating relatively quickly.
What does it mean for you?
For ordinary workers and homeowners, the ongoing uncertainty is likely to continue to bite hard. More jobs will almost certainly be lost and bill-payers will have to face the challenges presented by reduced incomes.
The net result is that volatility is likely to remain the watchword in the coming weeks and months. For seasoned investors who adopt a long-term view, this should not represent much of a concern, with ups and downs - albeit in this instance relatively significant ones - a normal part of stock market investing.
As mentioned previously, investors might also be thinking that there are bargains to be had, and will have been regularly consulting their personal finance software, and seeking out the best forex brokers to make gains.
Their optimism may eventually prove well-founded, but caution and patience should be the order of the day. Investing in the stock market should be thought of in terms of five years or more, rather than weeks or months, and that is the best context through which to view the current turbulence.