Last week saw some of the biggest falls in global markets since 1987. This volatility creates
discomfort and fear for many of us wondering where this will end up.
This current ‘moment in time feels like an eternity’ but like all previous events similar to this will pass and become a blip on a future financial chart.
Why the significant falls in market?
It is not the number of cases which affect the markets and business but the huge disruption to business and life.
At the moment it is still difficult to quantify the disruption but it will likely be more significant than SARS and past financial melt downs but markets and business will recover.
Europe plus a few other areas have now become the epicenter of the virus due to not being properly prepared and taking this seriously. Cases will rapidly escalate in these areas until governments take similar actions to what China did.
China and places like Singapore are leading the way in showing others how to reduce and deal with the crisis by ‘lockdowns’ and other extreme measures which have never been seen before.
OPEC is an example of an organization which along with Russia failed to see the warning signs and as a result the price of oil crashed.
What to do?
Astra is working very closely and on a daily basis with our fund managers to make sure they are minimizing any losses.
It is important to also understand that exiting the market now will only mean it will take longer to make back any losses, history has taught us this time and time again.
Often some of the largest gains appear during market volatility [Friday US markets up over 9%] so missing these days will have a huge impact on your investments.
The hysteria in markets has resulted in both business’s which are directly affected by the virus; airlines, hotels, tourism, manufacturing and others dropping as much as others which are not affected.
Astra are working with our managers to make sure client monies are invested into companies and funds which will bounce back the quickest as things normalise in time.
Currenly we are in a period of hysteria and uncertainty causing panic and fear but we know from how China and places like Singapore have managed the virus, things will improve.
The virus is particularly devastating for the elderly and those with certain medical conditions but for the majority of us the effects of the virus are no worse than the flu.
It is important to remember the purpose of why you invested and not to focus on the situation now as ultimately like other similar instances the global economy will survive and as a result be stronger.
The alternative of cashing in your investment now and crystallizing the loss by going into cash [almost zero interest] will only damage your net worth and make it impossible for you to recover the losses.
We are working as normal but the majority of our staff are working from home. If you have any questions or worries or just need to talk to us to reassure yourself of the best outcomes please reach out as we are here to support you.
We are currently working with our partners to put out regular updates as to what is happening.
These updates discuss how we are protecting clients monies and making sure when things do improve our clients will be in a position to benefit.
Be careful for those who may want to exploit the current situation and encourage you to make hasty or irrational decisions based on the last few weeks.
Lastly thanks for your support and patience and I hope you and your loved ones stay safe
during these difficult times.