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The Best Equity Market Performer

The first COVID-19 coronavirus case was identified in late December 2019 in Wuhan, China. Over the past two months the virus has wreaked havoc on China. While 89%[1] of all identified cases are within China’s borders, cases have been identified in 72[2] countries. Do you know which major country had the best equity market performance over the prior month? Hint: It may surprise you.

Question:

Which equity market performed the best over the prior 1 month? (as of 3/2/2020)

  1. S&P 500 (U.S.)
  2. Nikki225 (Japan)
  3. Shanghai Composite (China)
  4. FTSE 100 (U.K.)
  5. DAX (Germany)

Answer:

Shockingly, the Shanghai Composite, China’s major stock index, was the best performer over the previous month. In fact, of these five major markets, the Shanghai Composite is the only market with a positive return.

Shanghai Composite

The historic S&P 500 sell-off during the week of February 24th was painful for investors. As fear over a U.S. slowdown spread, investors reacted. However, building an investment strategy off fear is rarely a good idea. Using China as an example, the epicenter of the coronavirus outbreak, when the number of new cases slows, markets will most likely recover.

It is important for investors to take a long-term perspective. Those willing to stomach short-term volatility will be rewarded with long-term gains.

APA INFOg StayCourse MECH

[1] Source: www.worldometer.info/coronavirus, data as of 3/2/2020
[2] Source: www.worldometer.info/coronavirus, data as of 3/2/2020

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