The stock market does not wait for the economy to bottom before it rebounds. Usually, the market rebounds a few months before the economy does.
As with many other investors, I have been waiting for a treatment, cure or vaccine before I would jump back in.
First, there was anecdotal evidence of positive results from HydroxyChloroquine with Azithromycin. However, there were also reports that it has negative side effects or that it may not work as well as first thought.
Then these came out:
In addition to the above, there are over 30 treatments and therapeutics being worked on.
I do not have 100% certainty that there will be a home-run treatment. However, there are likely going to be a number of treatments that will treat different patients with different situations or pre-conditions.
Therefore, I think that the death rate will decline. The pandemic will likely slowly improve from this point on. It will not go back to normal anytime soon. It likely will take one to two years. But if you wait for everything to go normal, then you might miss out on opportunities to buy stocks cheaply.
Also, there are many companies working on a vaccine for SARS-CoV-2. Therefore, the probability of a vaccine coming out is greater than one coming out for MERS or SARS. There is even this:
The majority of these companies working on treatments and vaccines will fail. But because there are so many, there is a better probability of a company coming out with something for SARS-CoV-2 than for other viruses.
Therefore, I jumped back into stocks today.
Of course, I could be wrong with any or all of the above. There could be collateral damage that surfaces later on, that I cannot foresee, such as a credit crisis because so many consumers might stop paying their mortgages or credit cards. Corporations are heavily indebted as well and might start a domino of defaults. The chances of this happening is low, due to the trillions of dollars that the Federal Reserve and the U.S. federal government are pumping into companies and individuals. But there is still a chance of this or other collateral damages.
But there is never certainty when investing in anything.