I have many thoughts on this topic, I'm not an expert and many of these are theories up with so the may also be flat out wrong, but I just disagree with the sentiment that markets are irrational or it's just feds pumping up the stock. I think saying those things is dismissive and anti-intellectual.

When I'm trying to think about the subject and whether I should invest myself, I'm trying to figure out what are the actual consequences of coronavirus long term and what in general are investor's motivations.

Here are few assumptions I make:

1. Stock price is determined by an umbrella of possible consequences and chances for each consequence. These are just examples, but for example there might be 30% chance that we can manage coronavirus while reopening the economy, +50% chances that we will have a vaccine in 1 year period that we can mass-produce etc. For each of those consequences we can think of an appropriate SP500 price (I'm taking SP500 here as an example, but it could be any other index as well). If economy goes back to normal, the SP500 price could go to 3400 again. Investors will try to predict what are the odds and in total stock price should reflect what investors on average think the odds of something to happen are.

2. The way investors react to these possible consequences comes from that specific investor's expectations and long term strategy. It's important to know what is average investors expectations and risk tolerance. If SP500 is 2200 (which it was when people were expecting it to go to 1700) and you expect 90% of chances of SP500 going back to 3400 within 3 years you can determine that you have 90% chances of making 54% returns within 3 years which is crazy good. So at this point it makes sense for most investors to buy in, because even if it goes lower, you will still be making very good returns. Now that SP is at 2800-2900 I think it's still better to buy in than not, but you can't obviously expect as fantastic returns. I bought in and even with a little bit margin, but I have enough margin left to buy in more if stock should fall. I'm investing and looking at least 5-10 years ahead. So it makes sense for investors to buy in now that they are not crippled by fears of what coronavirus might do - it's already quite clear it's not the end of the world even if it might shake up economy further throughout this year.

3. There are possibly some positive long term effects of coronavirus. Increased productivity, tech and automation from having been forced to experiment with WFH etc. I think all of these might increase productivity. I'm speaking of those not to just sound optimistic, but these are something a lot of people don't mention.

These are just rough thoughts I have right now, but in conclusion I have decided to buy in since I have determined that in 3-7 years there are very high chances of making very decent returns. I doubt corona can affect us for that long timeframe.

Of course it's more risky than usual to buy in right now so if you have low risk tolerance it's up to you. If you possibly need that cash within 1-3 years, then maybe not buy in, but whether you should buy in right now should be determined with when you want to use that money and how much you are willing to risk. Usually more risk means more reward since only people who can handle that risk will be buying (so stocks will be more underpriced when there's more risk and uncertainty). And since I don't want to use that money before 5 years anyway, for me it definitely makes sense to take that risk. Also even if stocks fall just after you bought in you must be able to handle that and not think you did the wrong thing and sell. You likely wouldn't be able to sell in time anyway.

Many people are fearful right now which means a lot of people are holding cash or shorting. Once fear subsides, stock will start to climb faster again so you should want to be in before general fear subsides..