Going viral: The economic impact of a health crisis

There’s also the larger question about whether the coronavirus will be significant enough to be the beginning of the end for an 11-year global bull market.

A market that has benefited New Zealand’s 2.9 million KiwiSaver members and the various investment funds that have exposure to global equities. A market that went up by more than 20 per cent last year.

In classic economist speak, right now it’s ‘‘too soon to say’’, but the early signs suggest that despite the Dow Jones Industrial Average posting five consecutive days of decline, it’s not the beginning of the end for the charging bull.

What it does do, however, is give all investors a reminder that the theory of risk is different to the practical experience of it. While it’s easy enough to sign up to a highrisk fund when markets are powering north, it’s a whole new ball of wax when they’re hiccupping or heading south.

Although this is not a rerun of Sars in terms of local impact, it is worth comparing the headline numbers.

Sars was an animal-sourced virus that infected 8096, killed 774 and took seven months to contain. The majority of deaths were in the first three months.

Coronavirus is also an animalsourced virus which has infected 6000 people and 130 have died after five weeks. Like Sars there is no cure, but the process around containment has started a lot earlier.

A year after the official containment of Sars there were just four deaths and there have been none in the 16 years since. Global growth rebounded and the market took off like a firecracker. Hopefully we will see the same pattern with coronavirus.

But better hang on in the interim. It’s going to be bouncy.

Mike ‘‘MOD’’ O’Donnell is a professional director, writer and facilitator. His Twitter handle is @modsta. While this column is his personal opinion, MOD is a director of Tourism New Zealand.