KDP - How Not to Panic During This Earnings Season
On average, the market returns 10% per year. But since March 23, the S&P 500 index has rallied nearly 30%, condensing three years of typical gains into a mere few weeks. This rally comes after the fastest stock market plunge ever.
Put simply, the COVID-19 pandemic has created historic volatility. Unemployment, low oil prices, credit risk, and a closed consumer sector lend to a bearish outlook. But a record government stimulus, the promise of reopening the economy, and the hope of a coronavirus cure are all bullish wildcards.
There's legitimate reasons for both short-term optimism and pessimism, creating uncertainty. But one thing is certain. As we enter the period that companies report financial results -- commonly called "earnings season" -- the numbers are going to be ugly. Here's how not to panic.