How To Handle The Shock Of A Market Collapse

The Covid-19-induced market crash in 2020 may have been the first you experienced, but it won’t be the last. Lear from it so that panic won’t rule your decision-making next time.

2020 has been many things, none of them what we expected. I remember hearing about this new coronavirus in mid-January. Early reports were certainly worrisome and I was keeping half an eye on developments in China. Then, in early March, on the day the first case was announced in South Africa, I was in Durban doing a presentation on the possible impact the virus – which we now know as Covid-19 – could have on local and global markets.

We’d changed the topic of the presentation a few days earlier, as the magnitude of the virus became apparent. But even then I totally underestimated the actual impact. But I did make two predictions at that Durban event. Firstly: the impact on markets would be real, with a drop of over 30% very likely. Secondly: global economies would go into recession.