Markets around the world are suffering huge losses, problems, and are under stress since the COVID-19 took over the way we live. Businesses suffer but do all businesses suffer?
If you want to look at the future of money and investment, it is not difficult. Trust us, all you have to do is look at the business markets. What is happening in the now is a clear indication of what will happen tomorrow.
Researchers, scientists, and not even governments can identify or speculate the future as good as financial markets. It is pretty obvious who will survive and who will not by looking at the current situation of business companies.
Around the world, small to mid-size businesses began to suffer the most since the pandemic played havoc on business markets. The situation is irreversible and it does not seem to be improving and going back to normal sooner. We have to live in the world with a pandemic on our hands.
It has become a survival of the fittest and the smartest both ways!
Economic Situation based on Current Position of U.S Stock Markets.
If you look at S&P 500, Nasdaq 100, and Russell 2000, you can tell a lot of things. The S&P 500 is 15% down, Nasdaq 100 4% and Russell 2000 29% down. It is easy very obvious that stocks are risky because of the pandemic. It was calculated and known, all businesses will suffer, but not all suffer the same way. Some businesses are going to suffer more than others. It is studied in economics that when a business cycle takes place, including a recession and a boom. A downturn and upward movement of the GDP graph. Several things happen in between.
Firstly, during the recession, only the fittest survive. When the others go out of business and a demand for more service and product is created, the businesses that survive gain better by becoming profitable. It is just like nature. Only the fittest survive. This is nature and economics!
What can the U.S Stock Markets Tell Us?
U.S stock markets have a lot to tell us. If it is showing dissimilarity in the numbers than it is easy to figure out, what is going to be the future of business. We cannot say much about the global stock markets but a similar trend is also observed and none are topping the charts.
The stats for S&P 500 show that big companies with large capitals are somewhat stable until they are liquid and bear cash for their immediate responsibilities. Though the situation is not the best, there are chances of survival for most of these large companies. Nasdaq 100 is doing much better than other stock markets because of the huge cash availability and risk management. Most tech companies listed in Nasdaq are not dependent upon labor or scared of shutting down. The operations can be performed remotely and the functioning is not disturbed the way others have been. Some businesses are thrown back with force.
The Russell 2000 lists small business firms and it shows a huge decline, since the onset of a pandemic. The problems are not easy to solve for small businesses after all. Limited capital, low liquidity, and dependency on labor, and many other factors make small businesses vulnerable.
The small businesses are suffering the most and are at higher risks of getting wiped out. The battle again comes down to the survival of the fittest. The companies are barely putting it together to stay intact in times of hardships. But those, which survived the storms, will grow their profitability ultimately when the tide is high.
Economy and the Markets.
Businesses are leaping faith, as they go on to spend the last bits of what is left to simply stay in business. Since the U.S economy took a downturn, and the officials declared the economy is going through a recession, it has become very obvious that the situation is unavoidable. But everyone has to suffer, with some businesses suffering way more than others.
Businesses cannot wait for the governments to sound the bells of ‘All clear’. The situation for the best business was never perfect. Businesses can grow and develop in times of crisis as well. This is exactly what companies are learning to do, amid the COVID-19 crisis.
Every business small, medium, or large is planning to thrive. People are rational, and they always take marginal decisions. Doing what is best for the business and need of the hour is what helps make the right decision. As life returns to markets and work, you should be the one attracting the customer traffic to your business. You do have a list of SOPs to follow but that does not mean you cannot be smart. If you own a small business of any kind, this is not the end of the world. No matter how worse the situation becomes, your goal is to thrive and perform fine if not best.
This does not mean, you getting bankrupt either. But if you have your ducks in a row, to survive and thrive, then give it your best shot. You may not know what happens the other day. The pandemic situation may worsen or get better, who knows? But you are responsible for your business and there are always chances of expansion, change, improvement, and downsizing.
The financial markets were never perfect and neither will they be perfect ever. You have to play your best shot in the wet pitch anyway.
To learn more on how our financing program can help your business grow, chat with a live representative on our website : https://alignchancefinancial.com/ we want to hear from you.