An outbreak of swine flu in Mexico has kept equity markets on edge over the past few days. Investors fear the virus will make an express round-the-world trip, and along its way, kill off any signs of a global economic recovery.
Sani Hamid, director of wealth management at Financial Alliance, says based on what happened during the SARS crisis, stock markets lost about 14 percent over a four-month period and bottomed out in March 2003.
"So if you used those assumptions itself, what you'll be seeing is about 14 percent decline and markets bottoming out somewhere in August. So that's the base case that we see now," he adds.
Hamid advises investors not to let uncertainties surrounding the flu virus distract from their longer term goals. Instead, he suggests using market weakness as buying opportunties. He believes now is a good time to pick up stocks as equities are unlikely to revisit the lows seen in March 2009.