The current environment and the impact of COVID-19
We have held the view that stock markets are due a correction for some time now. Overly inflated equity valuations, high corporate debt levels, profit margins expanding without any sales growth for a decade – to us, these were just a few of the signs that something needed to change.
The crisis brought on by the COVID-19 pandemic, as with the crises before it, was triggered by an unexpected event. The full scale of this crisis as well as the extent of the ramifications are as yet unknown. Numerous countries have gone into lockdowns, with ongoing uncertainty around how long these will last, alongside entire parts of the global economy coming to a compete standstill.
