Why is coronavirus affecting my investments?

 

The ongoing concern is what the prolonged effect of coronavirus will be on businesses around the world. From quarantines, to closed factories and grounded flights, investors continue to worry about the impact on things like consumer demand and manufacturing supply chains. Simply put, people around the world aren’t out there buying, doing or making things.

 

In the last few days, we have seen the first high profile corporate casualty with the demise of Flybe (although it’s important to note that this was a business already in difficulty) and at the same time, Saudi Arabia launched an oil price war, which saw the price of oil down more than 20%. Whilst this might be good news for some when it comes to the petrol pumps, it was another blow to the world economy.

 

 

So, what should I do?

 

At times like this, we choose to remind you of those famous words from Warren Buffett (widely considered to be the greatest investor in history) that; “the time to be fearful is when others are greedy, and greedy when others are fearful.”

 

Attempting to time the markets is near impossible, but what we do know for certain is that this particular shock will pass.

 

 

Investing for the long-term

 

History has shown time and time again that on occasions such as these, it is important to be patient and maintain a long-term investment horizon. Whilst we may not be able to time markets, we know that investing regularly is a very powerful way of reducing portfolio risk because making regular monthly contributions tends to smooth out the peaks and troughs of market movements.

 

As is the very nature of investing, there will always be times when markets go up, and when markets go down. The important thing to remember in all of this is that although these ups and downs can trouble short-term investors, you are investing for the long-term.

 

Our advice in times like this? Be patient and remain invested.

 

If you have any questions please don’t hesitate to get in touch with us at support@silo.co.uk, we’re here to help.