Coronavirus – keep calm and carry on?

As the fallout from the coronavirus outbreak continues, it’s becoming harder for even the most relaxed of us not to feel concerned. 

With news that Italy is in a nationwide lock-down and with stories of supermarkets running low on stock as people panic buy, the fallout continues. Even if we suspect much of this reaction is inspired by uncertainty - and perhaps also irresponsible media reporting - it’s hard not to worry.

Last week, the markets fell to their worst week since the 2008-09 global financial crisis, and the volatility continues.

So I wanted to offer reassurance.

In the words of Fidelity, one of one of the world’s biggest investment managers, the best thing to do is to “stay calm, carry on”. Afterall, we’ve been here before. 

We’ve had World War II, Watergate, Vietnam, the Falklands War, the Gulf War and 9/11. We’ve also had the AIDS Epidemic, Ebola, Swine Flu, Bird Flu and SARS. Each caused the market to dip or pause, but life went on, and the stock market continued upwards, as you can see in the graphic below:

It’s also important to note that usually, market ups and downs are a more regular occurrence and that we’ve been enjoying an unusually lengthy period of market growth recently - which is easy to forget! 

My general advice is to avoid any knee-jerk reactions and to stick to your long-term financial plan. History has proven that the true value of your portfolio will reassert itself over time. This is a sentiment echoed by the video below by financial research provider Morningstar, which provide some helpful advice on preparing for the downturn:

And let’s not forget that there is positive news out there: 

·       China coronavirus cases are slowing, temporary hospitals are closing, and schools and shops are reopening

·       In Italy a 38-year-old patient who was initially intubated because of his serious conditions, is now breathing autonomously

·       103-year-old grandmother has become the oldest person to beat the Coronavirus

Elsewhere, the virus is bringing out the best in people - online providers in Italy, for example, are offering free services to the 16 million people in quarantine. These include free access to Amazon Prime video, unlimited mobile data, free ebooks and free newspaper premium subscriptions. And elsewhere, Italian football fans are donating their ticket refunds to hospitals in need.

I don’t wish to downplay the volatile nature of the world we’re currently living in, but I do wish to reassure you.

If you’d like to speak to me about this further, please give me a ring any time.

And of course, I hope you remain especially safe and well during this difficult time.