The Economic Outlook

The economy has taken a hammering, but the stock markets are on the rise. Joblessness is climbing, but it seems that the real estate market has not been affected (yet). The coronavirus pandemic has disrupted businesses of all shapes and sizes; alongside the volatility, leading financial outfits are working to accommodate employees and clients.

Corona’s economic chaos was not founded on a weak economy. Quite the contrary. This is good news. It means that we are not witnessing a replay of the 2008 market turmoil. Things will begin to look up again just as soon as people are allowed to return to stores and feel financially confident to do so. Close to 70% of G.D.P. is anchored by consumer spending — in stores, online platforms, eateries, and entertainment venues. Each of these industries will take their time to bounce back from this, but it will happen.

As consumers rethink their spending habits, business owners are also going to have to revamp the way they interface with customers. Even as social distancing and health regulations put physical barriers between customers and businesses, the human interaction will remain important. Shops and companies that make customers feel valued and “seen” will benefit from their loyalty.

In the property and real estate markets, demand hasn’t declined. But as the full range of the economic recession is exposed, that could change. It is likely dense urban communities will fall out of favor. With remote working becoming the new norm, distance learning gaining steam, and growing health consciousness, families will probably opt for more spacious homes in more rural places.

While the stock market is always a risky enterprise, right now the tickets doing well are those with a long history of success. High-quality companies and prospects are the safest bet. They are the most stable over time and have a track-record to prove their capacity to yield returns. With immediate financial and medical concerns, it can be hard to see beyond today, tomorrow, or even two months from now. But investors and clients need to “hunker down” for the long run, because even this will pass.

It took corona to reveal a fundamental flaw in the economy: too many people are living from one paycheck to the next. The consequences of this very real economic problem are evident. With the right outlook and guidance, it is possible to recoup financial success and be better prepared for positive market activity when it does start happening again.

Written by

Vadim Belyaev is an experienced investor, banker, financier, media manager, and philanthropist, and is recognized as a leading Russian businessman.

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