Adjusting the way we look at global equities
Share prices, rather than profits, sales or even a company's total value, are likely to receive a disproportionate boost as valuations are pushed higher
STOCK markets are running at feverishly high levels while the global economy has suffered a major setback due to Covid-19. Is this disconnect just investors' complacency or is there more to it?
Investing has always been a complex subject, even for finance professionals. What makes it more challenging - and rewarding - is when we are investing through a crisis such as the Covid-19 pandemic.
Even though global equities saw an abrupt plunge of minus 30 per cent in March this year, they have since staged an astonishing V-shaped recovery across April and May. Stock prices around the world appeared to have shaken off the negative effects of Covid-19 and are now near their pre-crisis highs. However, a quick glance at news headlines would tell investors a completely different story - businesses worldwide are furloughing employees and several prominent companies have even filed for bankruptcy.
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