Riding the Second Wave

As the number of COVID-19 cases begins to rise again in many countries, some investors will naturally begin to wonder how this may affect their portfolios.

Of course the short answer is no-one knows. There is still a lot of uncertainty surrounding the pandemic, and uncertainty is not something you want to be basing new investment decisions on.

Commenting on the current landscape and what may happen next,  GWM's  Head of Investment Research Jonathon Curtis said:

"Worldwide lockdowns in response to the virus undoubtedly caused major damage to economies. Many had never seen such sharp contractions. So governments have been more reluctant to reintroduce them as case numbers rise once more, although they can’t be ruled out.

Whatever the outcome though, we think it’s important to look beyond the coronavirus headlines. After all, there are a host of other things that could affect the economic landscape – an upcoming US election, whether the UK and the EU can agree on a Brexit deal, more potential trade disputes between the US and China, and massive central bank intervention.

It’s also important to keep in mind that the economy and the markets aren’t the same thing. While record falls in GDP were being reported earlier in the year, markets were actually on the rise again. The same thing happened in 2009, for example, when much of the world was still reeling from the great financial crisis, yet markets were rebounding.

As you can see from the chart above, in recent times Markets have tumbled on the back of events such as the dot-com bubble in 2000, and the Global Credit Crisis of 2007 before rallying and going on to reach new highs.

Discussing how to guard against market volatility Curtis added;

"That’s not to say we’re predicting what markets will do. There are so many things that influence them, many of which are uncertain. That’s why we believe having a diversified portfolio, investing across a broad range of asset classes, regions and sectors, remains so important. It doesn’t guarantee your portfolio will be immune from every short-term shock, but over the long-term, it should allow your portfolio to capture market gains in the good times, and provide some protection if things turn sour."

Qualified & regulated remote financial advice.

Having assisted over 10,000 clients worldwide for over twenty years, GWM are perfectly placed to guide international investors through these times of uncertainty.

As fellow professional expats living overseas, we understand these are worrying times. If now, or in the future you have any questions regarding your financial portfolio, DB pensions or savings, you can contact GWM by clicking here

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