Coronavirus sends global markets downwards but how should investors respond?

Coronavirus sends global markets downwards but how should investors respond?

The FTSE 100 has fallen to a 12 month low off the back of the spread of Coronavirus worldwide. It’s an old adage, but the one thing investor’s like least of all is uncertainty. It might be said that market panic has spread more quickly than the virus itself. Today (27 February 2020) the FTSE is currently sitting under 7,000 points, compared to over 7,400 on 21 February 2020. A big market sell-off makes news headlines, it affects pension values in the short term, but how should the ‘average person on the street’ with investments respond to this newest of financial crises?

Sometimes a look back in history can be a reasonable predictor of the future. By that I mean it has been shown people who time their market interventions (buying low or selling high) do no better over the long-term than people who invest their money and leave it alone. That means when the market experiences a sudden fall, as it is now, it’s a time to sit tight and be reminded about the longer-term horizon of investments.

The long-term view is what we advocate at Fryer Glass. Investors are better advised to alter the way they think about financial markets, as opposed to how they act. For example, in the nearly 100 years of data, the U.S. stock market has returned 10% gains per year on average, though it has rarely returned that in any individual year. If you’re considering cutting your losses, you may choose to consult a financial adviser who may be able to put you at ease. Sometimes doing nothing is actually doing something—think of all those people who sold out of the market in 2008 and missed the following 11 great years for equities.

If you are considering your investment options and want to obtain independent financial advice, contact Mark Fryer at Fryer Glass on 01276 301103 or email [email protected]

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