Corona… Consuming Everything…

When's this all going to end?  How bad will it get?  What lies ahead?  What's happening to my money in the meantime?  I hope you're not expecting me to answer these questions!  I've got no clue and am as worried as you are.  Sorry, but that's the truth. 

It's horrible not being able to see friends and family.  Not to be able to carry on with life 'as normal'. But I know we're doing the right thing by, effectively, shutting society down.  We HAVE to keep the spread in check so the NHS can cope.  Flatten the curve as they say.  Makes a lot of sense to me.

Big Falls...

So, it's all very doom and gloom and I don’t really have anything positive to say on the money side of things either.  Many of you have seen the values of your pensions and investments fall by 10% to 20% (or more!).  Wow, these are big falls.  Comparable with the credit crunch just over 10 years ago.

BUT, we need to understand how the financial markets behave.  They HATE uncertainty.  They HATE not knowing what the solution is.  They CRAVE stability.  During times like these, the markets run for the hills.  You can feel it, it's palpable.

I suppose we all want reassurance, it's not just the markets that need it.  We all need to see, at least a glimmer of light at the end of the tunnel.  We need to see some signs that the end to this nightmare is in sight.  Trouble is, there just doesn’t seem to be much chance of that at the moment.

That said, when we DO have some clarity, perhaps the final stages of a vaccine being created or perhaps a significant slowdown in infection rates and deaths, the markets will start to gain confidence (and so will we!) and I genuinely believe the bounce back will be significant.  It always is after a big downturn.

How's Your Money Looking?...

Many of our clients have been protected, to some degree, from recent market falls because we've positioned their investments to hold a large quantity of safer assets (what I call 'boring stuff').  This has helped but it hasn’t meant there haven't still been big losses.

‘Boring stuff' isn't, by its very nature, exciting.  When markets are growing (as they have been, pretty much since the credit crunch), holding 'boring stuff' means one's investments won’t grow as quickly as the market generally, but that’s OK becasue it’s there to reduce the falls when things aren’t going so great.

Setting up an investment, in my view, is as much about what happens when things go wrong as it is about making money.  If left alone, an investment is likely to grow well, over time.  That side of things tends to look after itself.  The key is to build in some degree of protection when things aren't going so well.

Have Courage...

If you’re invested for the long-term, you really should ride out the storm.  Easy to say, I know.  When we get on top of this virus (which we will), normality will start knocking at the door again.  When that happens, you'll see the recovery begin.

Who knows how long it will take for your values to recover to pre-virus levels?  But, history tells us that it might not be as long as you fear.  I believe in the markets and I believe in the power of humanity.  I believe we'll conquer this virus and that prosperity will, once again, prevail.

We're Here...

I've positioned the business so it can operate just fine in pretty much any situation.  We're not going anywhere.  We'll continue to stay in touch with you and we'll continue to be available if you want to talk to us. 

I want you to know that we care about you and how you must be feeling at the moment.  Even though, as I've mentioned, I have a lot of confidence that things will recover, it doesn't mean I'm not worried either.

Not sure if this little blog is of any help at all.  There's a lot of doom-mongers out there and there's a lot of blindly optimistic people as well.  I like to think I'm balanced about things and can hold an objective view.  This is one of the key things clients tend to value from us.

Until next time when I hope I'll be feeling a little more buoyant!...