Your investment portfolio in unprecedented times

Firstly and most importantly, I hope you are staying fit and healthy whilst managing to cope with the current circumstances and Government measures. These are certainly unprecedented times, and I can only keep my fingers crossed that life will return to normal soon.

In regards to investment portfolios, you will have no doubt seen how the global investment markets have fallen especially since the outbreak took hold in Italy, and subsequently the rest of Europe. Much of the fall was initially through fear and uncertainty, followed by concerns on how much damage this will do to the world’s economies in the longer term.

Governments and Central Banks have been very quick to announce a multitude of financial measures and stimuli but these have done little to alleviate the fears of the global markets. However, on the back of the latest stimulus plans that were agreed in the US, the markets rose for three days running at the end of last week. Showing how volatile the markets have been this hasn’t happened since February.

I would not like to say this will be the end of any falls, or that the bottom has been reached, as we are in unchartered territory. Indeed, already this week we have seen sharp increases and decreases in the markets and I suspect the volatility will continue for some time to come.

It is an easy thing to say, but I realise from my own investment portfolio not an easy thing to practice, which is not to panic at this time. History has always shown that shares have a good record of generating real returns over the long term, and these falls eventually become blips on performance graphs.  It is also true to say that bear markets (where a market falls by 20%), such as the one we have now entered, have always been far shorter than bull markets (where a market is on the rise).

I realise this is a very unsettling period, as we all come to terms with the Government lockdown. I am having to get used to home schooling my daughter who was meant to be sitting her GCSE exams this summer! At Hanover we are all getting used to working remotely, as per the Government guidelines, which I do not envisage impacting on our service capabilities to you.

For more information and support, please do not hesitate to contact your adviser.  In the meantime please stay safe and we look forward to seeing you soon.

Richard Brazier – Director – Hanover Financial Management Limited