The scale of financial market moves during the coronavirus outbreak is reminiscent of the global financial crisis. However, this is not 2008 because the economy and financial system are on a much stronger footing.

The virus shock’s impact will probably be large and sharp, but investors should be level-headed, take a long-term perspective and stay invested.

The economic and financial backdrop today is much stronger today than it was going into the crisis of 2008.

This should not be an expansion-ending event – provided that a pre-emptive and coordinated policy response is delivered by policy makers to prevent the coronavirus from ending the cycle prematurely.

There are encouraging signs this policy response is starting to come together but it will need to be a joint and decisive effort between fiscal and monetary policy.

The key vulnerabilities that need to be addressed are cash challenges faced by companies, especially small and medium sized enterprises and households.

Authorities have strong incentives to take aggressive public health measures to prevent the virus from spreading due to capacity constraints in the health care sector. This is likely to result in a sharp and deep economic slowdown in the short term.

Market moves have been compounded by oil prices plunging more than 20% – on track for the biggest daily drop since in the early 1990s – as an OPEC pact to stabilize prices unravelled.

This should ultimately benefit growth, but it also risks temporary financial and economic dislocations in energy-heavy sectors, such as emerging market commodity exporters.

It is a time for investors to keep a long-term perspective. The ultimate depth and duration of the coronavirus’ economic impact are highly uncertain, but the shock should be temporary as the outbreak will eventually dissipate and economic activity will normalize – assuming the needed policy response is delivered.

Many fund managers are staying at or close to their benchmark weightings in equities, although they will be overweight the more defensive quality and minimum volatility style factors.

Fund managers favour portfolio resilience, including cash and sustainable investing strategies, and still prefer U.S. Treasuries instead of lower-yielding peers.