Expanding our time horizon will see us through
The global economy was already at the late stage of its business cycle, with debt and valuation levels hitting historic highs, even before the Covid-19 pandemic
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MANY have experienced dramatic equity market meltdowns in the past but few have ever witnessed such sudden eruption in global equities. Compounded by a crash in oil prices, March witnessed the fastest slide of equities into bear market territory since 1929.
The S&P 500 has since climbed more than 25 per cent (in US dollar terms) since March 23, but the outlook remains challenging for investors.
Mounting uncertainties have kept the outlook opaque. Volatility has skyrocketed across different asset classes, and implied equity volatility in March surged past the peak of 2008's global financial crisis. This combination of factors sent investors fleeing from risky assets such as equities and high yield bonds, opting for cash or the relatively safer Treasuries.
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