Estimated reading time: 3 minutes 55 seconds
Markets are down by more than 25% since the high recorded in January this year. Malls, cinema halls are shut. Work from home which was a preference of few organizations and privilege of few employees is being instituted widely across. Roads are empty with self-imposed quarantine and, in general, concern about how the Covid-19 spread may progress.
My Whatsapp is flooding with messages with skepticism, hope, worry, fear and confusion. I have learnt new terms like social distancing and flattening the curve. Newspapers in their zeal so that they can claim – “you read it here first” – are resorting to sensationalism and publishing half-cooked stories with almost no regard on the sensitivity of the matter. How about some self-restraint and responsibility in journalism?
Statisticians, forecasters, analysts and market pundits are working overtime to predict what will happen. Some say there will be a V-shaped recovery, and some are betting on a prolonged recovery. Slicing and dicing of historical data, Trailing PE/PB, Forward PE/PB, Market cap to GDP, multi-year returns after market crashes etc. is being presented to support various claims. What to believe in and how do I derive actionable intelligence?
People who are in the late 30s and above remember well, the carnage of 2008. Most of them including myself experienced it in our portfolios and learnt what happened when the markets recovered. Does this mean we should just start trading indiscriminately and we will make money? Many brokers are reporting an increased number of new accounts opening and trading activity. I am being asked by clients “Should they exit completely and reinvest later?”, “How long will this last?”, “Should they increase the investment now or defer to later?”. Here is my message to all the clients and the investors on what may be done.
Mitraz research team has been closely tracking the market and restructuring the investments to maximize the risk-return reward. We have also instituted some central monitoring controls and executions for more efficiency and better outcomes. Please contact your Adviser if you have specific questions regarding the steps being taken on your portfolio.
Lastly, I urge you to be careful of all the information that you are receiving on social media and verify as much as possible before propagating. I have put some mobile detox time every day to get away from some of the cynicism, negativity and pessimism. I am exercising caution for Covid-19 but have not stopped social interaction completely. Most of the Mitraz team is working from home while ensuring minimum disruption. A trite remark “This too shall pass” but still very relevant knowing how humanity has evolved till now. Please take precautions and stay safe.
The writer is the Managing Director of Mitraz Financial Services Pvt. Ltd and can be contacted at email@example.com