The phrase “unprecedented time” has become a daily expression over the past six months due to the COVID-19 pandemic and consequential economic crisis. Predictions based off data from previous market crashes and an inevitable second wave of the virus anticipate a second, perhaps more devastating period of volatility. With this in mind, the buyside is taking a finer look at the effects of a crisis and how to better prepare for the next “unprecedented time”.
Higher Highs, Lower Lows
Some are looking to the 2008 market crash for advice. That crisis resulted in the longest bull market in history and some are predicting that trend will continue: higher falls, but longer bull markets. The former seemingly happened overnight, while this time around, we get to see what happens when a crisis hits with slower speed. Moreover, this is the second global economic crisis within 15 years for many people working in the industry; a second chance to do things better.
Preparation is Key
Figureheads at major firms all agree; preparation is key. Matt Stauffer, DTCC Managing Director & Head of ITP, states, “The buyside is focusing on the challenges ahead leading them to reallocate their resources to ensure that they are prepared for a potential second wave of disruption. “We will likely see more attention paid to operational efficiency and a greater push towards automation as a result.”
A New Office Life
For fear of further spreading COVID-19, many companies adapted to a remote workforce this past March. Though it is difficult to recreate the social aspect of the traditional office life, the negative impacts of WFH have been little-to-none. Thus, many folks expect a huge change in the typical work life once the pandemic ends.
Best Execution takes a closer look at the pandemic - related challenges facing the buy side here.