Investments: Coronavirus and the Financial Markets

There are many people far more qualified to advise on Coronavirus than me, but most will know little of how this affects your finances.

At the time of writing, UK and World cases are increasing and there is no sign of a cure.
World production has been hit with China almost closing its boarders to imports and exports as well as incurring reduced consumption.
China is the 3rd largest market so what affects them affects most people.
Tourism has slowed dramatically impacting many companies, small and large, as demand for goods and services are decimated in some sectors.

How does this affect the Stock Market?

All the above affects stock market companies and their share price suffers.
There has been some selling of equity stocks in favour of Government Bonds, but most investors have remained unchanged.
A cure is unlikely within the next 3 – 4 months, which will lead to a continued downward pressure on shares, but investments into shares are long term investments and when the market bounce happens you could lose out significantly if you have sold out.
It seems logical at face value to try and time the market, but by the time you decide to do something, the market has already considered the options and priced in the consequences.
Banks are so much stronger than in 2008, due to increased capital holding and they have stated they will support the markets; that said, you can expect continued volatility.

What does the future hold?

Clearly I didn’t have advanced warning about Coronavirus, just as I don’t know what’s going to happen to the markets going forward, but what I do know is that markets are much lower today than they were at the end of January, so I will be hoping to take advantage of this.
I may be a Chartered Wealth Manager with a highly experienced investment team who continue to produce way above average returns, but even I don’t know if it’s the right time to invest, I just know it’s better to invest when markets are down…….
They could go lower, but as I said earlier it’s better to be in the markets than out, and trying to time the markets is nigh on impossible.

Finally – be wise and sanitise.

It costs nothing to talk to me and may cost your future self a lot more if you don’t, call us on 01480 896466.

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