Relax, Covid-19 isn’t as bad as previous crises, says head of equity solutions research at MSCI
Compared to the tech bubble in the early 2000s and the financial crisis in 2008, Covid-19 has been a walk in the park
While the coronavirus (Covid-19) pandemic may have caused historically high levels of volatility, the impact it had on the global equity markets was not as large as previous crises. Speaking at Calcalist’s ‘Investment Amid Uncertainty’ conference, Jean-Maurice Ladure from MSCI compares the reaction to Covid-19 to other crises, notably the tech bubble of the 2000s and the global financial crisis in 2008.
“During the Covid-19 crisis, global equity markets captured by our index lost a third of its value,” he told host Sophie Shulman. “In perspective, the last two crises… were worse at the time. The tech bubble was 50% loss and the financial crisis was 60%. This happened over several years, not weeks like the Covid crisis.”
Ladure describes how the 2020 crisis was “obvious” to observe since everyone was sent into lockdown and businesses were forced to close. In previous years it was less visible and it took a while for everyone to fully grasp the impact of the new situations faced by the world. After seven months, he has described the world as “waking up from a bad dream” and quickly returning to levels seen before the pandemic.
“It’s amazing when you think about it. We’re not out of the Covid-19 crisis but the global equity markets are now back in positive territory,” he said.
MSCI is an American finance company serving as a global provider of equity, fixed income, hedge fund stock market indexes, and multi-asset portfolio analysis tools. Founded in 1969, it has more than 3,300 employees and has an annual revenue of $1.27 billion.