After a strong 2019, investors enjoyed a good start to this year—until late February, that is. As the coronavirus (officially COVID-19) began to spread across the world, governments began to enact social distancing measures that forced shutdowns of large swaths of their economies. As investors grappled with the potential impact, markets went into a freefall, with stocks tumbling and credit spreads soaring.

Policymakers have stepped in to shore up the public-health system, capital markets and the economy with an unprecedented wave of fiscal and monetary policy—including the $2 trillion CARES Act in the US. The goal was to reduce the damage from the virus and measures to contain it—and make it easier for the economy to rebound out of recession once the public-health crisis eases.

While there has certainly been plenty of pain for investors, this isn’t the time to move to the sidelines. The dislocations created by illiquidity and an indiscriminate selloff have left opportunities. High-yield bond spreads, for example, were about 900 basis points at the end of the first quarter, boding well for forward returns. However, it will require careful research and security selection to avoid issuers that may be at greater risk of default.

In equity markets, trying to time the bottom of the market isn’t a good idea, because it has historically started bouncing back quite some time before economic recessions end. With low economic growth and near-term challenges to earnings, we think it makes sense to balance profitable-growth stocks with high-quality cyclicals, focusing on sound businesses.