The coronavirus has been making investors sick with volatility in the past trading week. The effects of the virus are in their early stages, but historical data shows that markets have been relatively immune to diseases in years past.
Of course, that’s not to say they don’t have any impact whatsoever, especially given the past week of trading.
“Epidemics and pandemics do have market consequences and raise risk, and…they can be deadly,” wrote David Kotok, chairman and CIO at money manager Cumberland Advisors, in a research note–based on a MarketWatch report. “External shocks can derail economic trends and abruptly alter market sentiment. Not all risk is economic policy or monetary.”
According to data from Dow Jones on 12 epidemics, the markets have taken a hit only once in a 6-month period and twice during a 12-month period based on changes in the S&P 500. The largest drop came within a 12-month period back in 1981 when HIV/AIDS rattled the markets–the S&P 500 fell 10.73%.
The coronavirus has been compared to SARS in terms of its impact and origination and experts feel the effects should be short-lived on the markets.
“If we use the SARS epidemic as a guide, however, any economic impact from the current coronavirus is likely to be temporary,” the Wells analysts said.
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This article originally appeared on ETFTrends.com.
