The ‘corona crunch’ has decimated the stock market in an unprecedented manner. A bear market is difficult to navigate at the best of times, let alone during a global pandemic. At times of uncertainty, it can be easy for investors to get caught up in a herd mentality, following others for direction and reassurance. Surely, if the share price is on its way up at a time like this, you’re onto a winner? But herein lies the danger of the bandwagon. You could be joining a run that has already taken place or extending a stretched valuation.
As we look out across the wasteland, certain companies are standing tall or getting even taller – seeming winners from the trends and changes in behaviour that Covid-19 has brought about. It’s hard to ignore the excitement, from the prospect of the next generation of antiviral therapies to the technology that will underpin our increasingly digitalised lives. But before being overrun by the hype, it’s worth stepping back, unpacking these hot stocks and asking: are they really smart investments?
The race for a cure