The World Health Organisation declared the global outbreak of coronavirus a pandemic this week causing uncertainty around the world not only in terms of how investment markets have responded but also on a human level. We know that, naturally, you will be feeling very fearful of current events and media reporting on the matter has fuelled a lot of the panic.
We have continued to monitor the situation closely and have been keeping in touch with investment experts frequently and whilst no one can predict how long it will take to contain the spread of the virus to allow a return to normal, like similar declines, the important thing to remember is that this will pass.
Over the long term, we know that investing in a globally diversified portfolio will provide growth but there will always be short-term temporary declines along the way. It is therefore important to stay calm and not make any knee jerk decisions as long-term investing principles will prevail like they have done for every other event in history.
We understand you will find it painful to see your portfolio falling in value and like past declines, we are always led to believe that it’s worse than the previous one and things won’t improve. This is not true.
From the conversations we have had with experts over the last few days, it is clear the this event will result in a short but deep recession, but a rebound in equities looks more likely if policymakers implement co-ordinated stimulus measures, and we are seeing this with the UK’s emergency rate cuts and huge fiscal stimulus package.
We expect markets to continue to be volatile in the short-term and we will continue to keep you updated.
The link below takes you to a video that we have recorded.