There's a silver lining to every crisis
Add BT as a preferred sourceGLOBAL stock markets set a record speed for crashes. Over the next six to twelve months, economic data is expected to be bleak. That is known. However, as investors it is our duty to consider the horizon beyond the next year as the market is a forward discounting mechanism. Large global liquidity injections both on a fiscal and monetary level mean that the odds of a public health crisis unfolding into a financial crisis is now muted.
Predicting the market bottom will be less important now given that global equity markets have crashed close to 30 per cent from its peak to trough. Are there further downside risks? Perhaps. But the conditions are in place for a strong market recovery which is but a matter of time. Therefore, it is imperative for investors to begin thinking about the winners that will flourish in the post-Covid-19 world, because it is likely that the crisis will dramatically change how we live and work in the future.
What are the types of businesses that could thrive as we come out of this huge economic shock? Looking under the hood of the 24 sub-industry groups (rather than sectors) and applying some logic can help give us a good idea.
