Market Turmoil
The market turmoil is horrendous and is affecting us, our clients’ investments and markets globally. Major stock markets around the world have fallen by more than 10% at the time of writing and it is unprecedented in format – it is indiscriminate, savage and rapid and at the moment, we do not know when it will cease and normalise before giving chance for recovery. It may be one of the worst ‘over-reactions’ to economic progress and returns ever seen but till the beginning of the end of this virus arrives, no-one knows. We have to remember however that markets react and over-react and as IT speeds-up, sadly they exaggerate both on the upside and the downside as people can implement their fears (and greed) with the touch of a button. They forget the base realities upon which they made the initial judgements too. The Federal Reserve in the US took the decision to lower interest rates to in the range of 1% to 1.25%. After an initial positive reaction to the drop, markets remain incredibly volatile.
Best-made strategies we have constructed almost appear to have been futile exercises and absolute irrelevances because the panic in certain arenas has been almost more infectious than the underlying disease itself and we do not say that glibly at all. We have been there before and indeed with worse but that does not make this any easier. Encashing investments at this depressed point in time is not recommended and if cash is required, investors may be better advised drawing on other deposit based sources.
We are not perfect but we have experience, qualifications and a successful track-record of service to thousands of clients behind us. We are not immune from such events as hard as we try to position ourselves to be ‘balanced’ but our clients believe and understand that we are likely to know far more than them about such things and they trust us to use those ‘skills’ to do our best for them so they don’t have to worry. Sometimes that is to do very uncomfortable things like buying cheap investments at the darkest of times and that is what we must do, where cash permits. We must not let emotion freeze us into inactivity but allow the mechanical and more auto-pilot ‘us’ continue to do what we believe is in the best longer-term interests for all the clients who have shared that trust in all of us and our abilities.
