21 May 2020
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
There is not hiding it, the numbers are not good, expected but still bad and getting worse.
Australia had just over 13 million employees by mid-March 2020 and the data points to 780,000 workers having lost their job due to COVID-19 restrictions which have shut down pubs, clubs, gyms, cinemas, beauty salons and required workers to stay at home.
These social distancing restrictions are likely to push Australian unemployment from the current 6.2% back up to the 11.2% high in 1992 before business activity begins to return back to a new type of normal.
Click for chart.
Back in the 1991 recession there was great panic with assets prices dropping for residential property, for listed companies and interest rates being pushed up to new highs by a Reserve Bank of Australia Cash Rate rising to 17.5% in January 1990.
It was financial chaos.
What was the lesson for investors?
It will pass, remain invested according to your appetite for volatility and when fear and panic take hold, take advantage by buying more quality assets at discounted prices.
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