Dear valued Investor
Please find below some wise advice in these concerning times.
Our investment decisions are generally drive by the emotions of fear and greed and these regular updates on COVID-19 have certainly caused us to become anxious rather than keen to consider opportunities that may arise.
A fear-based reaction to market volatility may mean that an investor could lose out on the subsequent market gains if we are paralysed into an inability to take action.
I believe that those of us who wish to invest money for our grandchildren’s education and for other long term investment objectives, need to get ready to invest before long. This could present the opportunity of a lifetime.
That said, we need to be careful that we follow the normal sober risk profiling & other steps in our financial planning regime before getting into the markets. We will also look for signs of a slowing in the downward share price trend before advising you to step in.
The chart below illustrates how the significant equity market lows of 2008 (the Global Financial Crisis) were followed by the highs of 2009, with an annual performance of the index delivering a stellar 32%.
It is also critical to note that significant volatility in markets that year, meant the low point reached negative 15%.
While we cannot be sure of how long this volatility will last, it is useful to remember that volatility is normal (although it sometimes shows abnormally large swings), and discipline is required on our part as investors to ensure that our well-considered financial plans deliver on long-term investment objectives.
What we do know is that markets will recover as they did after the Global Financial Crisis a decade ago and the various crises before that.
On a short-term basis, portfolio managers are watching daily changes and will consider any portfolio adjustments that they deem necessary.
Don’t hesitate to make contact to discuss your thoughts with us.
Take care & let’s all try to exercise social distancing as much as we can.
Best wishes
Your team at Fish Eagle
