Do you know that trillions of dollars have been lost during the pandemic?
This pandemic has become a major talk in the world and one thing that business owners, CEO and investors are worried about is a recession and one thing that always happen during a recession is bankruptcy, transfer of wealth and becoming stronger at the end of the recession (for the strong companies). Do not forget that health is wealth, so during this crises, one thing that is important is your health. Stay safe and stay alive, if you do not do this two things, you won’t be able to enjoy your investment benefits at the end of the pandemic as well as the almost hitting recession.
Did you see that within a month, the market crashed over $6 trillion? Some people still manage to hold the Forbes richest without given their space on a daily basis to the pandemic. Jeff Bezos as at the time of writing is worth $139.9 Billion, this doesn’t mean that he literally has the money in his bank account pouring out but it is a combination of assets, real estates, shares in other companies and 11% in Amazon minus debt. It could be called proper timing as Bezos sold of closed $4.1 Billion worth of Amazon shares in February before the market crashed.
Simple explanation about a stock market investment value
If you have $1 cash/fiat in your hands as you may call it, it is said that the dollar remains the dollar unless inflation changes its purchasing power but when you put that $1 into the stock market, the value changes, some days it goes up and other days it goes down. At this point your stock worth is real when you withdraw it to fiat else every other thing is on screen.
The Internet Bubble
In the late 1990s the internet was the main thing and every business wanted to have a website, the common website then ended with the .com (dotcom). Every internet company that did an IPO then was certain to make hundreds of millions of dollars, the likes of EToys.com which issued shares during IPO at $20 per shares at the first day and at the close of the market at day one, the price ended at $76 per shares (What a good company I guess), the company raised over $100 million but when the bubble busted, a lot of company went bankrupt including EToys.com but companies like Amazon, Microsoft and others.
The Real Estate Bubble and the Great Recession
The real estate boom was on that almost everyone participated in, from bank workers, medical doctors, and even people without jobs. The bank made it easy for people to get loans if they were going to invest it in real estate but with the 2008 crash, the price of selling homes dropped drastically.
The 2008 Babies and the guaranteed market
During the 2008 recession, companies like WhatsApp, Uber, Instagram and so on came to live as they were able to utilize the recession. In the late 2010s, the stock market became a very good place to invest as the market stabilized in 2012 and kept on increasing in value.
The New Recession
Have you been putting cash into that 401k investment scheme for your retirement lately because the market looks good? A lot of people kept on investing in the businesses and investment until this year 2020 when the black swan came in.
The Great Lockdown
The pandemic came and shut down the world, businesses and even jobs, the market went from its peak to losing 75% of its value. A lot of people are crying over their loss and so many are withdrawing their funds even at the lowest price due to panic.
The Great Transfer of Wealth
It is not news that every economy and strong company always comes out of a recession strong. Investing is a risk, no one ever guarantees you of making a profit or even getting your money back as you might lose money while investing. A lot of people are going to try to find opportunities and solutions to problems. The economic slowdown might last for a very long time the ability to find an opportunity during this recession will help determine the future. Consult a financial advisor on how to handle your investment and think it through properly because sometimes, advisors might be wrong.
Stay safe.