Coronavirus & Investment Markets

Coronavirus & Investment Markets

March 2, 2020 | 4months | NEWS AND INTEREST

We’ve had a number of queries over the last few days regarding the Coronavirus and the potential impact this may have on the Investment Markets and we wanted to take some time to reassure you that our team are monitoring the situation closely.

The Coronavirus has taken centre stage in news reports over the last few weeks and the latest falls in the stock-market are a result of the virus spreading from China to other parts of the world. Latest reports suggest that the number of new cases being reported in Hubei, China, where the virus originated are slowing down which indicates the virus is being managed and contained.

As a result of the virus spreading, and a number of confirmed cases being reported within the UK and Europe, the stock-market has seen some volatility, as I’m sure many of you may have noticed. Rest assured, our team of advisers at FSS Wealth & Pensions have been in regular contact with many of the Investment Managers and financial experts we work with to ensure that we are fully briefed and prepared on what this may mean for our clients and their investments.

So what does that mean for the investment market?

Initially, the market seemed to think that the situation was temporary and contained mainly to China. The slow-down in growth and company profits was postponed because there is still demand for new consumer products which might just be bought later.

With the spread of the virus to the rest of the world, brings more concern about future profit and as such we must expect more volatility to come.

However, unlike previous economic and market downturns there is still a demand for goods and services, and we are being told by Investment Managers the current difficulties will likely be only temporary.

What should investment clients do?

Any downturn in the stock-market brings with it worry and uncertainty however it’s important to note that we have been in a similar situation before with illness outbreaks like SARs and Ebola and markets have recovered. Also, it’s expected that interest rates will be cut in the US and UK later this year which means that there will likely be a demand for equities.

It is also worth noting that the Bank of England has promised to do whatever it can to support the economy and is in regular contact with the Treasury and the Financial Conduct Authority to ensure the situation is managed effectively. Several of the world’s Central Banks are also watching things closely to ensure financial stability worldwide.

There’s an old expression we often use at FSS Wealth & Pensions – “Its time in the markets not timing the market” and it’s as true today as always.

Investments should always be over the medium to long term (five years or more) and we all need to remember that when faced with the ups and downs of the stock market.

The value of investments can fall and you may get back less than you invested.
Past performance is not a guide to future performance.

If you have any concerns regarding your investments, please contact your Financial Adviser in the first instance or our main office number 01294 539267 where one of our team will be happy to discuss these with you.