Stock markets continue to be febrile and you will be understandably nervous about your savings. My advice is to try to igonore valuations. Coronovirus uncertainty has led to some dramatic falls in prices but, on Friday, markets were up and the upswing in valuations were just as dramatic.
It goes without saying that it would be wise to take this virus seriously. The economic consequences of this virus are now beginning to be felt – for example by the hospitality and leisure industry. The NHS is going to be under huge strain.
But despite the seriousness of the current situation, I think it’s equally important to look to the future. At some stage, lives will return to normal, confidence will rebuild and market jitters will become a distant memory.
In the meantime our advice continues to be “sit tight” and wait for the clouds to lift. A good friend of mine put it like this. “Remember that most people are looking for reliable income. Thanks to money printing and low interest rates, yields on bank deposit accounts and sovereign bonds ( US Treasuries and UK Gilts) have been negligible. Hence most of us have been forced to look for income elsewhere – e.g. equities, commercial property, corporate bonds, infrastructure and so on. What would be the point of cashing up now, realising a real loss of 30% and then coming back into the market when prices have recovered and paying more for the very same stocks that you sold?!”
In the meantime, if you are worried or just want a chat, please don’t hesitate to pick up the phone.
Very best wishes,