We have seen the near complete shutdown of society as we know it. Words such as self-isolation, lockdown, shielding and furlough have all seen their usage increased and in some cases their connotations changed irrevocably. Many of us who are used to the hustle and bustle of office life find ourselves working from home keeping in contact with clients and colleagues digitally, with those with school aged children adjusting to their new job as full-time teacher as well.
The human cost has been immense, quite frankly to write an article about investments at this time feels opportunistic and tactless so I’ll simply try to offer some financial reassurance at this difficult time.
My father has worked in financial services since the 1980’s and I started in the late 1990’s. We’ve advised clients through Black Monday, the dotcom crash, 9/11, the Gulf war, the banking crisis to name a few of the bigger crashes. Now we are advising clients through Covid-19 and I expect we’ll be here through the next as yet unknown crisis.
One constant through all of them is that they pass. At the time they feel like they will never end. The investment losses suffered seem irrecoverable, but the crisis always does end and markets return to ‘normal’. In every case some time down the line, be it weeks or years looking back they are just a blip. Just as a profit is only a profit when you actually sell and realise it, a loss is only a loss when you sell and crystallise that loss – up until then it is all just numbers on paper. Of course, there will be companies that fail with shareholders wiped out and bond holders feeling the pain too. However, in a diversified portfolio far more companies should survive and go on to thrive again, paying back bond holders and making profits to distribute to shareholders. Until then, try not to worry about your investment portfolio and instead try to focus on staying healthy.