This is your lane for heightened precautions, safety measures, and so on. In the other lane, I think you maintain a positive, long-term outlook on how the economy and market are likely to stage a full recovery, with asset prices swinging back to new highs perhaps even by the end of the year.But in my view, it’s views like this that separate the smart money from the not-so-smart money over time. The fact that volatility tends to strike in scary clusters makes this kind of long-term thinking very difficult for many investors.

The iconic American company, General Electric, cut its workforce by 78,000 in 2019, bringing its total number of employees back to levels not seen since 1951. As General Electric slashed jobs and made efforts to cut costs, companies within the services sector went on a hiring spree – the healthcare sector added 361,000 jobs over the last 12 months, transportation and warehousing added 106,000, leisure and hospitality added 288,000 jobs, and professional and business services added 390,000. This anecdote for the 21st Century economy is a display of the continued rotation of the economy from a manufacturing/industrial economy to a services and consumption based economy.In my view, investors should be posturing over time for this evolution to continue apace, with no looking back.

China’s burgeoning middle class also showers money around the world, with tourists spending approximately $260 billion a year. These economic fundamentals place China and the global economy in a precarious position: one on hand, the economy benefits from sending people back to work and restarting factory operations.On the other, restarting the economic engine risks spreading the coronavirus even further and for longer. To underscore just how important China’s economy has become on the global stage, consider that over the last five years, the three most material sell-offs in the S&P 500 index have had ties to China.