Coronavirus: Learn lessons not hysteria from US stock market dive

Coronavirus: Learn lessons not hysteria from US stock market dive
Gowon Bowe (file photo)

NASSAU, BAHAMAS – As US stock futures continue to plummet over fears surrounding the Coronavirus pandemic, a well-known accountant says the situation has provided some ‘fundamental lessons’ and a backdrop for Bahamians to assess their risk appetite.

Gowon Bowe told Eyewitness News: “The average person should look at learning some lessons and not the hysteria.

“The activity in the US is one we should be paying attention to from the perspective that we are very conscious and focused in terms of what a developed market will be like but some of the negativity that is being observed in terms of the stock market volatility is that we don’t necessarily need here.

“We don’t have active trading, meaning we don’t have 10 percent or 20 percent of any of the outstanding shares traded on a given day.”

Bowe said: “Our main focus is really around how do we appreciate the science of it as opposed to the emotion. If you are a long term investor it’s probably no impact in the US and The Bahamas.

“We will get past it, business will return, profitability will be restored. If you are a day trader I would be concerned because you took some speculative positions and those may come back to bite you.”

He continued: “In terms of Bahamian citizens you may need to revisit your retirement and risk appetite and see if you have the right balance, should you have more or less in the stock market, should you have more in safer securities like the bonds or should you have more in cash type products. When this all calms down thy may want to revisit their portfolio balance so they can withstand some volatility or remove the risk of volatility.”

Thursday marked a historic day on Wall Street with the S&P 500 closed down, and the Dow and NASDAQ posted record lows as the coronavirus pandemic continues to rattle investors.

Bowe added: “If you look at the US the bond prices will be reacting in the opposite because as people run from the equity securities they will be running towards the actual bonds because those are considered safer and are the elements that have a steady yield and so the volatility is different.”