Coronavirus Update 23.03.2020
Hello,
Coronavirus is of course dominating all our lives currently and we want to continue letting you know how it is affecting the money you have invested with us.
Fairey Associates have moved most of our staff to home working, we are able to use our normal phone lines and systems meaning we can continue to offer the same behind the scenes service. We have also made the decision that none of our advisers are going to meet with you Face to Face for this period, this is not ideal, but we can use video based solutions as needed.
The markets have had another tough week, but as we said last week, this is normal in a period of uncertainty. How long will this go on? This is, of course, the million dollar question.
Markets need certainty and positive news. This will be hidden below the headline bad news. It will be signs of slowdown & declines in infection and deaths, particularly in the biggest economies. We have already seen this in China, however their numbers are rarely trusted. It will be milestone events in restrictions being lifted.
Most Fairey Associates clients will have money invested with the fund house Vanguard. The best summary we have seen this week came from Joe Davis, Global Chief Economist at Vanguard:
“This isn’t the global financial crisis
There’s one other thing that we do know, and it should give investors heart: The coronavirus is unlikely to be the second coming of the global financial crisis. The GFC was exacerbated by compromised underlying factors within the financial system that required a structural realignment of markets. Such a dynamic isn’t in play with the coronavirus, where recovery is more likely akin to a disaster-relief effort.
Investors, we’ve been here before. We’ve seen 13 corrections and eight bear markets in global equities in the last 40 years. That’s about one every other year. And over that 40 years, global equities increased by a magnitude of 17 times.1
So hang in there. This too shall pass.”
It’s tough, our natural human emotions suggest we should do other things, but emotional responses are not normally the best decisions. You are not alone everybody has the same reactions. This article from Behavioural Investment sums it up perfectly.
The basics of financial planning advice still apply:
Keep well, if you have questions pick up the phone and if you, or anybody you know, wants to speak to us now, then we are still fully open and here for you.
Regards
Paul
· The value of an investment and the income from it could go down as well as up.
· All investing is subject to risk, including the possible loss of the money you invest.
· Past performance is not a reliable indicator of future results.
· Diversification does not ensure a profit or protect against a loss.
· Please remember that all investments involve some risk. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
· Tax and Estate Planning Services are not regulated by the Financial Conduct Authority.
· This communication is for general information only and is not intended to be individual advice. It represents our understanding of law and HM Revenue & Customs practice as at 23rd March 2020. You are recommended to seek competent professional advice before taking any action.
Coronavirus is of course dominating all our lives currently and we want to continue letting you know how it is affecting the money you have invested with us.
Fairey Associates have moved most of our staff to home working, we are able to use our normal phone lines and systems meaning we can continue to offer the same behind the scenes service. We have also made the decision that none of our advisers are going to meet with you Face to Face for this period, this is not ideal, but we can use video based solutions as needed.
The markets have had another tough week, but as we said last week, this is normal in a period of uncertainty. How long will this go on? This is, of course, the million dollar question.
Markets need certainty and positive news. This will be hidden below the headline bad news. It will be signs of slowdown & declines in infection and deaths, particularly in the biggest economies. We have already seen this in China, however their numbers are rarely trusted. It will be milestone events in restrictions being lifted.
Most Fairey Associates clients will have money invested with the fund house Vanguard. The best summary we have seen this week came from Joe Davis, Global Chief Economist at Vanguard:
“This isn’t the global financial crisis
There’s one other thing that we do know, and it should give investors heart: The coronavirus is unlikely to be the second coming of the global financial crisis. The GFC was exacerbated by compromised underlying factors within the financial system that required a structural realignment of markets. Such a dynamic isn’t in play with the coronavirus, where recovery is more likely akin to a disaster-relief effort.
Investors, we’ve been here before. We’ve seen 13 corrections and eight bear markets in global equities in the last 40 years. That’s about one every other year. And over that 40 years, global equities increased by a magnitude of 17 times.1
So hang in there. This too shall pass.”
It’s tough, our natural human emotions suggest we should do other things, but emotional responses are not normally the best decisions. You are not alone everybody has the same reactions. This article from Behavioural Investment sums it up perfectly.
The basics of financial planning advice still apply:
- We invest for the long term to ride out these bad times, we keep emergency funds to protect against these situations and this remains the same now.
- The Life cover and Income Protection we recommend you and your families are for times like this. Sometimes it is just an individual family going through tough times, on this occasion it is the global family.
- Whilst portfolios are down it is a worse time to take money out, if you can afford to reduce or stop withdrawals it is worth considering. You are likely to spend less in this period of self-isolation.
- Additionally this is also a better time to put money in, so if you have money sat in cash or can afford to increase contributions then please talk to your adviser.
- Should the worse happen, is your will in place & up to date? Do you have Lasting Power of Attorney – for both finance AND health? Do you have a funeral plan?
Keep well, if you have questions pick up the phone and if you, or anybody you know, wants to speak to us now, then we are still fully open and here for you.
Regards
Paul
· The value of an investment and the income from it could go down as well as up.
· All investing is subject to risk, including the possible loss of the money you invest.
· Past performance is not a reliable indicator of future results.
· Diversification does not ensure a profit or protect against a loss.
· Please remember that all investments involve some risk. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
· Tax and Estate Planning Services are not regulated by the Financial Conduct Authority.
· This communication is for general information only and is not intended to be individual advice. It represents our understanding of law and HM Revenue & Customs practice as at 23rd March 2020. You are recommended to seek competent professional advice before taking any action.
