Last week’s fretting over the coronavirus was a good illustration of a tug of war that has been playing out in financial markets for a while: between favourable sentiment and mounting longer-term economic uncertainties.

Until now, at least, that contest has been resolved in favour of ever-higher stock prices. But investors need to decide if they want to opt for more of the same, by continuing to implement an investment playbook that has served them well, or if they want to treat the viral outbreak for what it is — a big economic shock that could derail global growth and shake markets out of their “ buy-the-dip” conditioning.

Entering 2020, investors faced the challenge of balancing favourable short-term market technicals with weaker fundamentals, and doing so with government bonds providing little protection given the very low — and, in some cases, negative — level of yields in advanced countries.