As far as I understand, from various media reports, the Corona Virus has similar symptoms as flu but more aggressive and a vaccine is yet to be formulated.
The media have done an incredible amount of damage by reporting in such a way that the panic stricken public and authorities are incredibly fearful, which has led to where we are today.
In our opinion, the virus is spreading a lot faster than what is actually being reported. We
understand that children and young people suffer very light symptoms. In certain instances they may be carrying the virus and make a full recovery, without actually realising that they ever had the virus.
So what we see in the various media feeds are the more serious cases that require medical attention, hence the hype. It therefore appears that the death rate could be a lot lower than what is being published.
The panic caused by the virus has been unprecedented. The stock markets around the world have descended into a serious Bear Market. Italy and France are in complete shutdown. No restaurants or other public amenities are allowed to be open, only essentials, i.e. pharmacies and supermarkets.
As of 13th March 2020 the stock markets were down considerably:
FTSE 100 (UK) Down 30% 5366
DAX (Germany) Down 33% 9232
Dow Jones Down 22% 23185
Apple Down 15% 278
Our portfolios have not been as badly effected as most of them hold a good amount of cash assets. Most clients who are reliant on their investments in respect of living expenses, are drawing from the cash reserves and therefore avoiding sequence of returns, i.e. making a real loss by cashing up capital. This leads to your income not being affected by the crisis.
In not wanting to waste a good crisis, in spite of the problems in the world, we will be making some discreet moves to capitalise on opportunities that this Bear Market presents to us.
Nick Russell
Certified Financial Planner CFP®
Please note: This article does not constitute advice