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The epidemic of the century: These lessons can pull investors out of the crash caused by the Spanish flu message


• The Spanish flu claimed up to 100 million victims

• The recovery rally after the Spanish flu was very differentiated

• Defensive dividend stocks regenerated quickly

Nobody knows what the future will look like after the global corona pandemic and how many lives the virus will still cost, but a look back can help you better assess the danger in order to prepare your portfolio for the worst.

The most terrible pandemic in world history

The First World War, which lasted from 1914 to 1918, cost around 17 million people their lives worldwide. The Spanish flu, which raged between 1918 and 1920, cost 20 to 100 million lives, according to estimates. This comparison quickly shows that the Spanish flu is not for nothing called the worst plague that has ever passed the earth.

With up to 100 million deaths, the flu left far more victims than any other pandemic. The extremely aggressive virus caused the immune system of the sufferers to overreact, so that the immune system was directed against their own body and thereby severely impaired the function of the lungs. In contrast to the course of the disease with a COVID-19 infection, the Spanish flu was reinforced by a robust immune system or strong immune system of the respective patient. This also explains why so many young people fell victim to the Spanish flu.

Fear of the second corona wave

That the current COVID-19 pandemic is now, possibly in a second wave, taking a similar course to the Spanish flu after the end of the First World War is, despite all worries and fears, unlikely at the present time. “It will not be exactly the same situation as in 1918. […] People are also getting much older today, “said flu expert Silke Burda from the Robert Koch Institute in a BR article in 2018. In addition, living conditions from over 100 years ago cannot be compared to today’s For example, at the time of the Spanish flu there were no antibiotics.

Lessons from the Spanish flu for the stock market

In addition to concerns about health, investors are now of course also very concerned about the state of the global economy and the future development of the stock markets. In this context, however, a trend on the stock exchange can be seen from the course of the Spanish flu, which could become relevant again in the current time.

Since the Spanish flu started immediately after the First World War, the global stock markets were still in a state of shock due to the war, but reached their preliminary high in November 1916, but then lost around 20 percent of their market capitalization again in 1917. In the course of the flu wave, i.e. between 1918 and 1920, the markets then crashed again by around 20 percent.

In the wake of this stock market collapse, however, it can now be established that not all classes of shares had lost the same amount of value at that time. Even then, low-fluctuation stocks and shares with a high dividend yield offered a high level of protection for investors. Although these stocks also showed a weak phase parallel to the market correction, this was, compared to growth stocks or share certificates with a high dynamic and stocks with a small market capitalization, but only of a very short duration.

Through the crisis with a conservative strategy

With a focus on defensive dividend stocks and low-volatility stocks, which are mainly found in countercyclical sectors, investors have maneuvered their personal portfolio through the crisis over 100 years ago. This orientation aid can help private investors in particular to set up their own securities account in a crisis-proof manner and now from speculative positions
anticipate or increasingly rely on dividend aristocrats and solid industries.

Pierre Bonnet /

Image sources: Hans RW Goksoyr /,

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