We hope you and your family are all keeping well and are managing to cope with this ‘new world’ order at present.
We are now into the 3rd week of the UK lockdown and across the country, and the world, behaviour has changed. Whether it’s restrictions on what you can buy at the supermarket, the increased use of technology to speak to friends and loved ones, or the huge increase in the number of volunteers helping those in need, it’s no doubt changing the way we live.
It’s not just people who are changing. Companies are adapting to the ever-evolving pandemic and reacting to the financial impact.
There is no doubt that the way in which we live, and approach life will change in the future as a consequence of this current situation.
This can be seen as a positive for many of us.
All staff at Roxburgh Group continue to work safely and effectively from home, and we are all on hand to deal with the numerous and varied client queries and requests.
Irrespective of COVID-19, life continues to evolve and produce many challenges for us all.
Be assured, Roxburgh Group are open and available to help and assist where we can.
The coronavirus outbreak continues to pile pressure on financial markets around the globe.
Markets are moving quickly, and the decline into a bear market – commonly defined as a drop of 20% from a recent peak – was swift.
The situation, of course, changes daily, from crashes to rebounds.
In this kind of environment, we believe the best approach is ‘time in the market’, not ‘timing the market’. There can be a temptation to flee the market to reduce losses.
After all, it is often said that losses feel twice as bad as gains feel good.
However, fleeing the market could mean losing out on gains when stock markets recover. Panic selling could crystallise losses rather than avoiding further falls.
Bear with it
History has shown that bear markets are a part of investing. While declines have varied in intensity and frequency, the market has always recovered.
For example, after every downturn in the S&P 500 Index of about 15% or more since the 1930s, a period of recovery has followed.
Returns in the first year after the five-biggest market declines since 1929 ranged from 36.16% to 137.6%, and averaged 70.95%.
Over the longer term, the average value of an investment more than doubled over the five years after each market low.
The current market volatility, combined with the uncertainty of the impact of Covid-19, has created a very negative environment for the global economy. A recession is unfolding in the short term.
However, as long as the virus is contained in the near term, we believe the global economy will prove more resilient than during the 2007/08 financial crisis. This is primarily because:
• bank balance sheets are stronger – reducing the chances of a financial crisis;
• private sector imbalances are generally concentrated in the smaller, less systemically important economies; and
• governments and central banks appear set to provide much larger and better targeted support for companies and individuals.
We continue to navigate the volatility with a composed approach.
We are looking beyond the current crisis towards investors’ longer-term investment goals, while considering new opportunities that the recent market volatility has provided.
While our recommended portfolios are not immune to the wider market turmoil, overall, they are performing in line with our expectations in this environment.
They hold a varied mix of asset classes and investment styles with the aim to provide the market participation and exposures we believe will deliver the best client outcomes over the medium to long term.
Our investment committee have been meeting regularly to assess developments and implement appropriate changes.
These meetings have been hosted remotely using the latest technologies and have offered some humour to our day as we get to grips with this new challenge.
Looking back to previous market crashes, we see a persistent pattern. Therefore, while unsettling at the time, bear markets tend to be relatively short-lived and give way to much longer-lasting bull markets.
RISK WARNING The values of investments, and the income from them, can go down as well as up and you may get back less than the amount invested.
*** Good Financial Housekeeping ***
We produced a very useful document last year – What I own and where I keep it - for clients to take the time, locate and document their financial affairs for their own or families ease of future reference.
To date, this has been warmly received by many and therefore felt it might be appropriate to attach and circulate to you at this time.
Now that you have cleaned out your kitchen cupboards, wardrobes, garage or shed and need a break from tending to the plants or the garden, you may be sufficiently motivated to tidy up your finances and other important associated matters.
Simply print the attached document, complete as necessary and retain in a safe place.
If you would like us to hold a copy of this document securely on your client file please let us know.
If you don’t have access to a printer we will be happy to send a hard copy of this document to you in the post. Please let us know.
Please also feel free to forward this document onto any friends or family you think would benefit from this documenting process.
Continue to keep safe, sane and well!