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Quest for comfort at a time of pandemic and panic leads us to hope our govt has great experts – and listens to them

17/03/2020

Some interesting perspectives on the Coronavirus Crisis, especially around how some of our leaders are behaving

Point of Order

We needed an antidote to the grim outlook that prompted the RBNZ to reduce the Official Cash Rate to a level that will do precious little for our bank savings and triggered a further decline on the NZX50 that further shrunk share portfolios .

Help.

We were encouraged by a New York Times article by Neil Irwin headed How to Stop Worrying and Love a Falling Stock Market

It’s perfectly natural to be terrified, he assures us – but big losses bring certain benefits, too.

Great.

The fact that stocks are extraordinarily volatile right now … isn’t a problem with stock investing — it’s a feature! If it weren’t for these periods of fear, stocks would trade at levels that offer returns more like bonds or cash. The fancy academic name for this is the “equity risk premium,” but an ordinary saver can simply think of higher long-term returns as…

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