Wpg Free Press: Economist feels markets behaving exactly as expected in times of fear, uncertainty
Chi Liao, an assistant professor at the Asper School of Business at the University of Manitoba, who focuses on behavioural finance, said there is an inordinate amount of fear that’s affecting the way people are reacting.
“People are looking at their portfolios because they are scared and then based on their emotional reaction to the numbers they see, which are probably much lower than expected, they might react as a result, which is not a good idea,” she said.
Obviously, there have been market corrections in the past, but the scope and scale of this one has some unusual twists.
“This is unique in the sense that not only are we worried about our retirement savings, we are also worried about contracting the COVID virus and ending up in the hospital where there might not be an extra respirator available,” Liao said. “So there’s even more uncertainty.”