What a strange time we live in! Trying to navigate our clients investments through this turmoil is a nightmare given most of the data is only available “after the events” and depending on how you read it can indicate either good news or bad news! For example:
Figures released last week show that the British economy (measured by its GDP or Gross Domestic Product), shrank by 2.2% between January and March 2020. Not too bad but consider it should have grown by an estimated 2% that’s quite a hit! Bear in mind, the world went “Corona-mad” around 23rd March so towards the end of the quarter anyway! This figure (-2.2%) was in itself the WORST QUARTERLY PERFORMANCE since 1979 let alone what happened next! We now know that the following quarter (April to June) will see an UNPRECIDENTED and HUGE 15-20% fall – wow.
Think about the above stats and you will see that financial news will probably never be as bad as this! However, markets have been fairly robust overall, albeit with huge levels of volatility. Now, lets talk recovery…. The fact is, surely it can only get better from here and in fact the UK economy at least appears to be recovering very well. The “V” shape recovery everyone is so desperate for appears to be on route with the majority of businesses reportedly trading again by mid-June with huge numbers of employees being taken off furlough. Retail figures also show a huge 12% month on month jump alleviating further pressure on this bell-weather sector!
So, what does this mean for your investments? As we always state, investing is for the long term and being able to remain invested is crucial, allowing your investments the time to ride out any short-term drops. Diversification should also be a priority, meaning your money is placed in businesses and sectors across the economy, taking advantage as the economy continues to recover. Ready to help ensure your own Financial Fortress? Get in touch with your local experts today!