Coronavirus Market Update

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As you are all aware, the spread of the novel coronavirus (COVID-19) continues to escalate outside China despite the concerted efforts of many governments, communities and the World Health Organisation (WHO). Overnight the WHO declared COVID-19 as a global pandemic. This is the official recognition of the severity and risk the disease poses to the global population.

There has been considerable commentary comparing COVID-19 to the normal Flu season, and while on the face of it the fatalities are not markedly different, COVID-19 is proving to be very contagious and has a significantly higher mortality rate with the old, the infirm and the very young. So, while the risk to the young and/or healthy is well below 1%, it is the contagion risk to the more vulnerable groups of society that has exacerbated the risk posed by COVID-19 and hence the magnitude of the global response. In addition to the declaration of COVID-19 as a global pandemic, President Trump’s announcement this morning banning all travel from mainland Europe to the US for 30 days and the overall panic-driven behaviour in our society further contribute to the potential large-scale impact of COVID-19.

The rapid spread of the virus and the escalation of the containment measures, such as the ongoing closure of workplaces and schools, the imposition of travel bans, and other related restrictions, have already had an economic and social impact. Developed world share markets are now in bear market territory (a fall from a recent high of over 20%) and quite reasonably people are worried and looking for guidance.

As we have stated in previous communications, we have no crystal ball and after two weeks of heightened uncertainty there is no apparent end in sight. But this will end at some point, though we expect it to get worse before it starts to get better – but get better it will.

Many are worried about the capital in their portfolios and that is completely understandable. There is no doubt that in aggregate, corporate earnings have been negatively impacted by this event. Market reactions have in part reflected this but also expressed the panic and fear of many investors. What history has shown us from an investment perspective is that holding the course at times like this, while uncomfortable, has over the longer term proven to be a good strategy. And in the absence of reliable foresight we believe, as uncomfortable as it is at this point, maintaining your strategy and rebalancing to your respective risk profile asset allocation remains appropriate, as it is a proven process.

Finally, we hope that you and your loved ones manage to avoid COVID-19 and that our community and markets can return to normal as soon as possible.

This information has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this content is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs. Before making an investment decision based on this advice you should consider, with or without the assistance of a qualified adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. Past performance of financial products is no assurance of future performance.

Wealthness Pty Ltd ABN 13 231 248 112  [t/a Better Financial Planning Australia]  is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL No. 236523. It is important to be aware that Better Financial Planning Australia is not authorised by Infocus to provide advice relating to credit services or property advice. Infocus is not responsible for any advice outside of the scope of this authorisation and should you wish to act on any of this general information, please first seek professional financial advice.

Wealthness Pty Ltd t/as Better Financial Planning Australia will endeavour to update the website as needed. However, information can change without notice and Wealthness Pty Ltd t/as Better Financial Planning Australia does not guarantee the accuracy of information on the website, including information provided by third parties, at any time.

This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. Infocus Securities Australia Pty Ltd strongly suggests that no person should act specifically on the basis of the information contained herein but should seek appropriate professional advice based upon their own personal circumstances. Although we consider the sources for this material reliable, no warranty is given and no liability is accepted for any statement or opinion or for any error or omission.

Wealthness Pty Ltd t/as Better Financial Planning Australia does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this website. Except insofar as any liability under statute cannot be excluded, Wealthness Pty Ltd t/as Better Financial Planning Australia and its employees do not accept any liability for any error or omission on this website or for any resulting loss or damage suffered by the recipient or any other person.

Wealthness Pty Ltd (ACN 613 313 250) [t/a Better Financial Planning Australia] Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL Licence No. 236523.

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