The coronavirus pandemic is having a huge impact on our daily lives, but for many readers there is also an impact on their pension and investment funds due to extreme volatility in the financial markets and global economic disruption.
We asked Andrea Glover and Tony Delvalle from The Spectrum IFA Group about their thoughts on the current market conditions and the general reaction that they have seen from their own clients.
Andrea explained, “Financial markets don’t like bad news; the current coronavirus outbreak and the oil crisis that reared its head in early March are unfortunately no exception to that rule. We are all aware of the impact such events have on stock markets and although downturns are not unusual, they can be very unsettling. In these situations, it can be natural to consider taking some sort of action, but at times like this, often the best plan is to do nothing at all – particularly when you are investing for the longer term.”
Tony explained further, “It’s important to take a long term view when investing. An investment plan established during more settled times should not be abandoned when there is a market downturn. We keep up to date with the fund managers who are monitoring the markets to ensure the investments are protected as best they can be and grow over the longer term. In times like these, they focus on valuations, investment processes and look to buy more assets at attractive prices and with the appropriate risk for clients.”
Andrea went onto say, “No-one can say for sure how long this downturn will last, as we also have the US presidential elections and the end of the BREXIT transition period to come. We would be naive not to expect some further twists and turns in the short term, but we can look at what’s happened before when faced with global economic, social and political challenges. History tells us that the global stock markets weathered all of these well, with markets recovering over the longer term.”
Tony commented, “We have made sure that we have contacted every one of our clients during this time, to talk through the impact of the current situation. There has been a mixed reaction ranging from clients with further funds wanting to invest, in what they see as an opportune time, to other clients cancelling regular withdrawals so as not to compound any short-term losses. Each client has individual needs, aspirations and attitude to risk and it’s our role to understand this from the outset, as it is fundamental to the advice that we give.