So the Stock Market Crashed… Why? And How am I Investing in Response?
If you’re an investor, it’s been a wild ride the last couple of years. Back at the beginning of 2020, Covid came out of nowhere sending the world into lockdown. Factories closed their doors, planes were grounded and people stopped leaving their homes. Share prices tumbled in response, and on March 16th 2020 the S&P 500 dropped 12% in a single day. Governments around the world were left scratching their heads as to what to do, having pulled all the available levers during the GFC and never having the nerve to reset them.
All that was left to do was print money. Within a couple of months government cash injections, coupled with a realistion that the world wasn’t going to end, led to a recovery in some sectors almost as sudden as the crash. Tech companies led the charge, with the likes of Zoom doubling in price between Feb and June 2020 as the world grappled with working from home. Amazon started the year around $1,800 and ended at $3,175 as everyone was forced to move their shopping online. The recovery wasn’t even though — companies like American Airlines got knocked down and stayed down, losing two thirds from their share price at the beginning of 2020 and never really coming back. Depending on where your money was, 2020 was a terrible or great year.
