Column: What's cheap may become expensive when the storm rages

Index funds are not the way to go at a time like this, writes Jan Eggertsen from T. Rowe Price in a column.

Jan Eggertsen | Photo: PR

Covid-19 has made 2020 a year of extremes. In addition to the tragic losses of human lives, we've seen health-related and economic consequences like no other. In the stock markets, corona also led to some of the biggest drops on the exchanges ever. The MSCI All World Index dropped no less than 33.6 percent in the period between Feb. 20 to March 23.

The response to the crisis was swift with aid packages, subsidiary schemes and political stimuli a-plenty, which led to the index taking another huge leap of 27.8 percent up the ladder again around the end of April. And today, we're almost back to pre-crisis price levels even though financial key figures look terrible.

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