How to Trade the Ebola Stock Market Sell-Off

Keith Fitz-Gerald

Editor's Note: Chief Investment Strategist Keith Fitz-Gerald has consistently been ahead of the game with his market insights and recommendations. We're sharing this Total Wealth with you as originally published last week before the markets fell off because we believe that the ongoing Ebola outbreak will continue to be disruptive to markets all over the world. But as we've seen many, many times before, out of chaos comes opportunity, and Ebola will be no different. Here's Keith…

I believe Ebola may be the most serious threat to humanity since the bubonic plague of the Middle Ages. Already it has spread to a dozen countries, including the U.S., and more than 4,000 people are dead. According to Dr. Bruce Aylward of the World Health Organization (WHO), mortality rates are rising and now sit at 70%.

This outbreak is more grim proof that the global trend of war, terrorism, and ugliness is indeed a growth industry.

That's the next trend we'll be discussing, though it's easily my least favorite both personally and professionally. But it's very, very important. So please stay tuned for that in the weeks ahead.

In the meantime, Ebola clearly qualifies as "ugliness." It has the potential to be a serious market event before it's brought under control. Recent trading suggests, in fact, that it already is by virtue of the fact that some $1.5 trillion has already been wiped from the exchanges on Ebola-related fear-driven trading.

So we need to talk about it logically – no hype, no conspiracies, and no nonsense. I mention those things because they're all emotional inputs that can cloud your thinking and have a seriously negative impact on your money.

Here are the tactics you need on hand for the Ebola market event.

Ebola and the Airline Industry

Air traffic is the main component to Ebola's spread, as the report from the Laboratory for Modeling of Biological and Socio-Technical Systems at Northeastern University makes clear. According to Prof. Alex Vespignani, as reported by Reuters, the risks "change every day the epidemic continues."

Other experts like Dr. C.J. Peters and virologists of the CDC and the U.S. Army's Medical Research and Development Command are cautioning that Ebola could mutate and become transmissible through the air.

While there have been some politicians calling for bans on flights coming out of West Africa, these seem unlikely to be enacted. The White House, the WHO, and other groups have made it clear that they view the idea of cutting off the three countries in which Ebola runs rampant as not just politically unfeasible, but also impractical as a tool to fight the spread of Ebola.

Yet, there's nothing officials can do about people's personal inclinations.

Keith Fitz-Gerald

About the Author

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Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.

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