The best asset to own amid the COVID-19 panic

The market crisis of 2020 is unprecedented. The crashes amid COVID-19 has brought the world economy to a standstill. Major sectors are down and many are facing potential defaults with no cash coming in from operations and a rise in demand to meet obligations. This has rippled it's way throughout the economy and many are now unemployed with the domino shutdown of businesses.

Emergency quantitative easing programs in the hundreds of billions are being implemented by major governments with a unanimous drop in interest rates to buy bonds and provide extra liquidity to financial institutions. Corporate bond yields and some government bond yields in the ECB have spiked higher to attract cash amid the panic. England, Canada, United States, China, Japan, and Australia are all implementing their own QE programs. With billions of dollars being injected the hope is that this excess cash will be spent and stimulate the economy.

Stimulus programs have also been implemented to help those affected by pandemic to provide cash for those in need and to restore confidence. Mortgage deferral programs have also been ordered to be implemented by major banks to prevent defaults, but the interest on the principal mortgages will still accrue. Confidence is at an all time low and there is no guarantee that artificial measures will work. Fear is widespread across all sectors and debt defaults are a very real possibility. Mortgages and rent will likely go unpaid due to high numbers of layoffs, and with little income and interest still payments still owed, defaults become a looming inevitability.

So, what's the asset to own right now? Cash of course. Cash is the most sought out asset on the market. With fear having gripped the economy, there is a clear demand for cash in the corporate bond market with interest rates having spiked higher. The reluctance for people and businesses to spend during these times is a result of the panic. Stock markets are crashing because investors are opting for cash due to the degree of uncertainty. Precious metals are also important assets to own, but in my opinion cash is more important to investors (and people) because its more convertible than metals. Gold and silver have rallied nicely over the past year and it's quite possible that they will continue, but I believe that they'll may take a break and maybe even fall before deciding where to go next. So what should you do? Make sure you have some accessible cash on hand, and maybe a few ounces of precious metals so you'll be ready for the uncertain days to come.