By now we have all heard the word coronavirus enough times to start getting fed up with it. The virus first found in Wuhan, China has spread like wildfire across the planet. Not only is the virus attacking people the implications of dealing with it have sunk markets on a global scale. Below is all the information you need to know about how the virus is affecting your portfolio and what to do about it.
Markets across the globe have crashed.
London FTSE has lost almost 125bn in the fifth-worst day in history for the index of UK company shares with a hit of 7.7%
When Profits are at risk, investors get anxious and sell, when everybody follows suit into an overvalued market it creates huge losses in short periods.
The panic started in China early last year and anxiety rose about the virus most thought that it would be contained. However, it’s spread creating panic and fear among business and consumers.
Apple closed one factory in China and other companies have followed. Most companies then issued statements saying that the virus would affect financial results. This will then create more fear and urge investors to sell as we explained above.
We also need to look at the behaviour of the normal consumer and how the fear of the virus will make some self-contained in their own homes and not go to work for fear of catching or spreading the virus. When this happens people refuse to travel, use air, sea or public transport this all has detrimental effects higher up the chain. Hotels and the travel industry lose business and in turn lose faith in markets worldwide. This also has a massive impact on local trade that relies heavily on tourism in some parts of the world.
Panic buying
News sprung from Australia that on the list of items being consumed in a panic was toilet roll and ant-bacterial products along with water and dried foods. This creates a vast demand and pressure to business and also affects market trading.
Meanwhile in Russia and Saudi Arabia
You may have seen the news that Russia and Saudi Arabia are in a price war over oil. Saudi cut it’s pricing to lows it hasn’t seen in 30 years because it could not work with Russia to agree on production cuts. Why is this? As we have explained above when consumers are not using flights the airlines don’t need as much fuel and creates a lagging demand. Airlines are the biggest customers for oil-producing countries. Saudi in an attempt to move this oil slashed its prices by 20% Now with so much oil in the market at an all-time low price other producers will not be able to compete and may face going under.
In these volatile times creates huge opportunities.
We all know the age-old phrase - “It’s not timing the market but time spent in the market” but getting in at a discounted rate is something few investors can turn a blind eye to. Utilising an advisor is key to figuring out your strategy and keeping it in line with your attitude to risk.
With what we have seen we have had a barrage of calls from old and new clients asking where and how they can invest in certain opportunities. Coronavirus is a worrying situation for all globally but also an extremely rare and fruitful opportunity to purchase stock at a very good price.
There is value in the market now if you look hard enough.
As the virus has affected not just certain industries but all of them, now is the time to secure shares we can help you organize this by clicking here >
Property is also set to take a wobble from the virus so if you are negotiating on a certain portfolio or purchasing buy-to-lets or a home of your own, now is the time to renegotiate on price as the stock market will affect this industry too. We have helped a client with the purchase of a property just last week, they saw a 100k sterling discount due to the concerns around the market. If you need help securing property or any advice contact us here:
Current shareholders
Don’t panic! The best thing to do have consistent valuations and ensure you understand potential impacts on your strategy. Don't leave your portfolios to correct and harvest your losses to offset any gains that have been made. Readjusting your portfolio might also be a good move. If your advisor hasn't been in contact to help you through this historic time it's time to look elsewhere.
New investors
We can walk you through exactly which stock will correct first and by how much to secure you great returns. The virus is a very negative element in the world today but there are lots of positive outlooks you can take. The term 'value' is what we look for.
Our advisory team has already sat 30 meetings each this week be it on the phone or in person with current clients who are not sure what to do with current stock and new clients that need advice on how to invest.
Do you need help with your current portfolio? Contact us here to learn more:
