Trading Online: How it Will Look After the Virus
The world has been struck by the novel coronavirus we know as COVID-19, and we’ve never seen anything like it. We can be forgiven for feeling like we are part of the plot of some Hollywood Sci-Fi movie. But one thing that we can take as fact is that there is going to be a world to go back to after all this is over, but what will it look like? For those of us who trade in online financial markets, it may be a very different scene to the one we’re used to. It’s difficult to predict, but let’s look at how things might play out.
How has the Situation Affected Trading So Far?
There is barely an industry on the planet that has not been affected by this situation, and we hear of a possible deep recession as we emerge from lockdown. We have seen a remarkable amount of volatility in the markets as traders are understandable worried and panic sell. This makes decision making difficult as we don’t have the usual patterns of behavior, and this makes modeling extremely difficult. But this is not to say that we shouldn’t invest in a time like this if you are looking to invest over a long period, then history shows you are still likely to see a return.
How Will Things be Different?
With so much uncertainty, it is difficult to tell how life will be after restrictions are lifted. With everyone spending more time at home, then it may be the case that life will be different from how it has been. We see a massive rise in home working, and this could create significant changes in various industries; for example, video conferencing software developers such as Zoom are seeing a massive rise in use; this could also see a downturn in commercial property development as companies require less space.
Will Traditional Currencies Be Safe?
Over the last decade or so, we have seen the rise of non-traditional currencies and buying bitcoin with PayPal has become just as common, if not more so, than withdrawing cash at the ATM. In uncertain times these new currencies are seeing a surge in popularity following an initial drop, but this was true of all currencies. What of traditional currencies? If we look to other comparable situations, such as the 2003 SARS outbreak, then we can see that the more significant currencies offer a safer option. This means that the US Dollar could be the best bet compared to those of less stable economies.
Various markets will be affected more in the short term than the long. But what history has taught us is that things always curve upwards over this more extended time, and if we are not looking to make a quick buck, then our investments will yield eventually. Patience is the key here, and unless we are in a dire financial situation, it’s essential not to try and find a quick fix and ride this out.