Will there be a market correction?
The corona virus has caused a decline in business worldwide, hence the world economy failing is not unprecedented. Singapore’s earnings expectation has been announced to have fallen by 42% in Q2 of 2020.
One would assume that the market would react to this news. However, the market moves by looking at expectations. Essentially, the market predicts how the economy could move and moves ahead of reality. As such, the news of a 42% decline in GDP will not cause any visible market correction.
How much should I invest in the market?
Currently, over or under investing are both equally bad.
The current market situation is very fragile and is being held together by the Quantitative Easing (QE) conducted by the FED. This temporary patch could be strong enough to prevent the collapse of the stock markets if continued.
However, if the FED were to decrease