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coronavirus and investing

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AMC theaters, one of the largest entertainment groups in America, reported their stock price was down 50 percent in August of 2020, compared to August of 2019. AMC is a massive corporation with backup funds, so their fate doesn’t bode well for smaller companies. In fact, one survey found 90 percent of independent entertainment venues may close permanently due to the pandemic. Imagine having been an investor who primarily put money into movie theaters and entertainment venues, right before the pandemic struck. There was some common understanding of recession-proof industries before. There were investments that were “safe.” But when a virus causes that recession, many of the rules change.

Consider this: during our last recession, people were flocking to the movie theaters. It was a reasonably affordable way they could treat themselves when, financially, times were tough. Now, walking into that enclosed space with recycled air and tightly-packed seats is enough to give someone a panic attack. When the fear of getting sick and possibly dying stands in the way of nearly every monetary decision people make, they make fewer moves. They go to fewer places. As a result, some stocks plummet, but some rise. Investment patterns have and may continue to take some sharp turns. Here’s a look at changes that have happened, and may happen, in investment patterns.

 

coronavirus and investing

Source: MARTIN BUREAU / Getty

Foreign medical markets

Every individual and even every country has their opinion on how the US handled this pandemic. In the absence of a resounding agreement that we handled it well, foreign entities are becoming more hesitant to make deals with the US as it pertains to medical industries. Whether it’s for supplies or research, other countries don’t want to rely on us. They want to keep their experts in house, for fear of security breaches. As a result, countries are rolling out strict guidelines when it comes to US investment in these industries.

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