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The world is facing the terror of coronavirus which has dismantled several domains. The stock market all across the Globe is going down. The COVID-19 has impacted 210 countries, infecting 7,598,803 people worldwide with death rate mounting up to 423,868. With the emergence in Wuhan, Hubei province, China COVID-19 pandemic has turned out to be the greatest challenge that human civilization has ever faced since the 2nd world war. Proliferating in a rampant way to every corner of the globe, with no approved treatment or vaccine, it poses a big threat to the entire human population.

COVID-19 and economy

Apart from the massive loss of life due to this pandemic, COVID-19 has severely dismantled the global economy with developed and developing countries facing the threat of increasing unemployment. With the implementation of lockdown, several companies fell into the state of crisis and lack of productivity. Lockdown will directly impact the GDP of countries with an estimated reduction of 2% from annual GDP.

Credit:Rabobank,Macrobond

Acc. to the World Trade Organization(WTO), coronavirus will reduce world trade by a third. If compared, the repercussions of COVID-19 are daunting and more intimidating than the Great Depression of 1930. It’s only when countries act together that, we can expect a faster recovery than if each country acted alone.

Black swan event for stock market

The environment in the stock market across the globe is low-spirited. Black swan event is an uncertain event with unprecedented consequences and is characterized by extreme rarity and the impact of COVID-19 on the stock market is one such example.

stock market
credit: google image source

There are instances where stock market crashes have been accompanied by a sudden surge in recovery. 

  • During 1992 Indian Stock Market Scam, Sensex dipped by 53% and recovered by an unprecedented 127% within 1.5 years.
  • The 1997-1998 Asian financial crisis, which emerged in Thailand had severely impacted neighboring economies, facing a setback of 40% in four years. Strangely enough, it leaped with a recovery rate of 115% in one year.
  • It was during the “Tech Bubble” crash of 2000 that the Sensex dipped by 56% in 1.5 years. But, it emerged with a recovery rate of 138% in 2.4 years.

Regardless of the examples, it’s quite reasonable that the economic setback due to COVID-19 is unfathomable and will take a long time before it’s restored to its normal state.

The scuffle between Russia and Saudi Arabia over oil supply and prices is one example of international factors impacting the stock market. With a sudden surge in the price of oil by Russia, Saudi Arabia triggered a response in order to keep the oil price under moderation. 

sharemarket economy
Credit:Bloomberg;EIA

In this period of turmoil ,what can we learn from the stock market ?

During this period, we can learn about investor psychology and behavior. Such time provokes investors to speculate the upheavals of financial markets, estimate what’s going to happen with the market on that day.

Share market is a mysterious island, where only a few people survive who are pro in taking risks. Short-sighted and low confident people get lost on this island easily. The only way to conquer such an island requires techniques and a pro-active approach. This is the very long journey which is full of adventure and thrill, so pack your bags and To guide you with the directions we are here with seven facts that would help you to move easily that nobody would ever tell you about

Invest only your surplus money

Share market is highly prone to risk factors, So always invest the surplus money that you won’t be requiring to fulfill the future need, and the value of money keeps decreasing if you don’t make a suitable investment in relation to your future goals. It is important to have realistic expectations in relation to returns that you get from investing in the share market.

How to pick the right share ???

To be able to survive the market, a good decision in term of share has to be made and for that proper analysis has to be done Factor responsible for the shares of good company are systematic track records, growth of asset, Balance sheet checked, dividend prospects, stable financial performance, independent from govt policies.

Timing of the stock market ???

Indian stock market is closed on Saturdays and Sundays and moreover, on the holidays which are being listed by them Timing is being divided into three slots:

  • Pre-opening session-9:00 AM TO 9:15 AM
  • Post -closing Session-3:40 PM TO 4:00 PM
  • Normal trading session- 9:15 AM TO 3.30 PM

Best age to start investing??

The best time to start investing is around your 20s after you complete your graduation because you make yourselves aware of financial patterns and discipline. The little pocket money will turn out to be a huge asset in the future and it will improve risk-taking ability.

Recovery time for the stock market ??

Statistics show that if stock market crashes within the range of 5% to 10% generally it will require a month’s time for the recovery. The biggest market drops were more than 40% which lasts 22 months and recovered about 60 months.

Depiction of Bull and Bear market ??

The bull represents long term climb in the market and optimistic behavior of the investor. And the bear represents the opposite of the bull market i.e, long term decline, and the investor believes that the market is not in favorable condition.

Most expensive stock of Indian share market ?

The most expensive stock is MRF in the Indian market that cost more than 65000 of Indian rupee for the quantity of one share.