written by reader What’s the bottom for the market selloff and are there any chinese stocks we could invest while the situation in US gets stabilized?

By vgudipati, March 5, 2020

It’s been a roller coaster ride so far this week. I’m a beginner in investing and waiting for the market selloff to reach the bottom. Given the situation that coronavirus just started spreading in US, anyone who can read the situation comment on what could be possible bottom or did we already reach it with today’s sellof?

Also, since the situation in china has settled a bit, is it wise to invest in chinese stocks and expect not much volatility?

Any comments are much appreciated!

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Travis Johnson, Stock Gumshoe
March 5, 2020 10:53 pm

I’d expect quite a bit of volatility among stocks everywhere for at least another month or two, quite possibly longer. China is probably going to be less volatile from here than the US in terms of actual business operations, since they’re starting to build back up and reopen and we haven’t yet moved to real closings or interruption (other than the fact that people are afraid to fly and businesses are canceling meetings and conferences, so the airlines are slowing down).

Nobody can know when or how it will work out. If you’re young and thinking about investing for the next 20 years, think about which companies will get through a pandemic, even if it gets significantly uglier, without a permanent loss of business. We know the economic impact of the coronavirus will be temporary, but we don’t know if temporary means a few months or a couple years or something in between, and the second-level impacts on the economy will linger for a while, but my assumption is that people and businesses will mostly keep chugging along even if we get a bit of a recession as a result, and will return to their patterns of behavior over time. Keep your eye on the prize and don’t waste too much time trying to figure out where the mythical “bottom” is — they’re never obvious until years later, and the only possible indicator that might be valuable is the vomit indicator. If the thought of buying stocks makes you want to throw up, the market is probably pretty close to the bottom.

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