Covid-19 setback a reminder for investors to tread carefully

THE extension and tightening of the "circuit breaker" measures announced this past week was a timely and sobering reminder for investors that the Covid-19 crisis is not going to end quickly.

Over the last few weeks, stocks have staged a strong rebound, fuelled by aggressive monetary and fiscal stimulus as well as talk of companies around the world restarting their operations. Even after a pullback recently, the S&P 500 is up nearly 27 per cent from its March lows. Closer to home, the Straits Times Index is up nearly 13 per cent from its lows five weeks ago.

Against that backdrop, it is tempting to believe that we have seen the worst of the Covid-19 crisis. And, perhaps we have. Yet, the difficulty that Singapore is now having in bringing the rates of infection down suggests that caution is still warranted.