Investors are worried about the coronavirus outbreak – not because they are moral pundits wishing for world health – but because a disease pandemic means trade is restricted.
Australia is currently one of the biggest exporters of iron ore and coal to China. It's estimated just shipping iron ore to China is worth $120 billion a year to Australian businesses.An outbreak of a disease like coronavirus puts ship captains on docks, closes ports, ceases truck delivery routes and effectively puts a stop jamb in the rive of money from Aussie mines to Chinese manufacturers.
Day-to-day booms and busts of the world's stockmarkets should do relatively little to your average mum and dad investor, largely because of the size of the stake they may hold. To put the ASX's current plunge in context, the market is now back to where it was in mid-January 2020. It's effectively only erased a month and a half of value gained.
Effectively all businesses that trade outside of Australia will be affected by delays caused by the coronavirus in some way.As most ordinary mum and dad investors do not rely on the market as their sole source of income, the payment of dividends is simply par for the course of "playing" the stock market.
Batten down the hatches. Now we'll see just how good the LNP is at managing the economy. This is affecting everyone, so, no more bullshit.
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