In December of 2008 The National Bureau of Economic Research announced that the US had been in a recession. Four months later, in March of 2009, the market bottomed and things began to turn around. If you remember that time, early 2009 did not feel like the end of the market turmoil. It felt like the world was ending as we knew it and things were only getting worse day by day. There was still bad news for months after the market had bottomed. During World War II, the market bottomed several years before the war was over and while much more bad news was still to come.
These are not anomalies. The stock market often tends to do better before things are actually better. In many cases, the market has found its bottom while it still feels like we’re in the middle of it all. Oftentimes it is action being taken that starts the turnaround for the stock market. Many believe that the same is true for Covid-19. The market has reacted negatively to what has been and what could continue to be a large economic fallout, and it could equally react positively to decisive action to prevent the further spread of the virus. But when that does happen and market finally hits it bottom, it likely will not feel like the worst is behind us.
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