Swift and decisive action from central banks and governments over the past couple of months has prevented the kind of collapse in equity and credit markets that has accompanied deep economic downturns in the past.

The unique nature of the Covid-19 economic shock and the rapid response from authorities, along with the likelihood of more support to come, leaves investors assessing two important lessons from past recessions.

History shows that economic contractions take their time in revealing the full extent of their financial damage. Missed payments, defaults and bankruptcies kick in with a lag. Jay Powell, chair of the Federal Reserve, nodded to that this week, suggesting it was too early to tell if stimulus efforts were sufficient. While lauding the efforts of Congress, he told lawmakers, “I do think we need to step back and ask, over time, is it enough?”