The recession caused by the Covid-19 virus will be deeper and last longer than the Financial Crisis. It will take a long time, if ever, for the same sentiment to return. Spending will not recover.
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The market has had a sharp rally over the last couple of weeks, which has investors feeling all "bullish" again hoping the crash in March was just an anomaly. However, there are some questions that "bullish investors" need to answer before assuming the markets are "all clear" of what ails them.
"I bought it for the dividend," is not an investment strategy, it is a rationalization for not having properly managed portfolio risk during declines. While the idea of buying dividend stocks is correct, there is a better way to do it over the long-run.
Currently, the Federal Reserve is in a fight to offset an economic shock bigger than the financial crisis, and they are engaging every possible monetary tool within their arsenal to achieve that goal. The Fed is no longer just a "last resort" for the financial institutions, but now are the lender for the broader economy.
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The Fed is hopeful they can inflate another asset bubble to restore consumer confidence and stabilize the functioning of the credit markets. The problem is that since the Fed never unwound their previous policies, current policies are having a much more muted effect.
While the coronavirus will eventually dissipate, the increasing premium on merit is likely to hang around. The bad news is that in many cases it will be too late to avoid the harm caused by leaders and managers and advisors who exploited favorable conditions for personal advantage.
Short term pragmatic solutions always seem to be the answer to crisis. Now in a fresh crisis, the Fed once again has no capacity to look beyond the crisis to the consequences of their actions.