The stock market is experiencing more volatility than it did during the Financial Crisis - expected volatility is at its highest level ever recorded. This is according to the latest figures of the Chicago Board Options Exchange Volatility Index (VIX) or “fear gauge” that tracks the jitteriness of investors.

In the second episode of our weekly podcast series, "Markets and investing in the time of Covid-19", Investec Wealth & Investment brought together experts to filter the plethora of information on the markets and to focus on the psychological and neurological aspects of adapting to the this new world we are living in.

• Professor Tali Sharot, Neuroscientist, Author and Visiting Professor at MIT, USA
• Dr Marc Kahn, Global Head of People and Organisation, Investec
• John Haynes, Chairman of the Investec Global Investment Strategy Group, Investec Wealth & Investment, UK
• Moderator: Christian Fraser, BBC correspondent.

As in life, the worst time to make an investment decision is when you’re highly stressed, says John Haynes. Rather take a breather and consider the facts.

One, we’ve just seen the first day since this novel coronavirus was identified where there were no new cases in China. While there’s a way to go, we at least know where we are going if the rest of the world follows the same pattern as China.

Two, central banks and governments are doing whatever they can to limit the damage and ensure that business and employment are not too badly affected.

• Covid-19 is challenging the three factors that are critical to our wellbeing: the joy of anticipation (with everything being cancelled), our sense of control and our need for social connection.

• While social distancing is the new norm, it is crucial to interact socially using the technology we have available, as alienation and isolation are primary causes of anxiety.

• The coronavirus is not unprecedented. Like in 1987, the market has been confronted with an event that unifies all the negatives in one go, with no time to process the positive. 

• This has resulted in a herd mentality amongst investors that will only subside once we have data that the virus is topping out and how long it will last.

• If the rest of the world follows the same trajectory as China, who reported their first day of zero new infections today, we are looking at a much more positive situation in 10 weeks’ time (the length of time China has battled the virus).

• The massive economic stabilisation packages being announced by the US, UK and the EU are evidence that our financial systems are able to take up the challenges posed by the virus. 

• This virus comes at a time of massive polarisation with issues like Brexit, the US-China trade war etc - perhaps it will provide the social cohesion necessary to galvanise communities and countries.

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