Bird Flu Investors Guide

With the recent spread of bird flu across Turkey, I thought it would be interesting to look at what effects a global pandemic of bird flu may cause (in relation to the stock market).

While searching google I found a brokerage company called BMO Nesbitt Burns that has attempted to answer the question in ‘an Investor’s Guide to Avian Flu’.

In the event of a pandemic, the brokerage predicts that:

• Stock markets will close when a pandemic is declared, starting in Asia
• Travel, tourism, hospitality and insurance will be hammered
• Commodity prices will collapse as economic activity grinds to a halt in China and India
• Realeestate markets will collapse
• There will be a temporary flight to gold and US Treasuries

It recommends:

• Put options on volatile stocks
• High quality bonds
• ‘High quality dividend paying stocks of companies with minimal exposure to risks’

Following any pandemic, the brokerage firm predicts an economic boom and suggests that there will be lots of money to be made in bargain real estate.