WE are living through exceptional times, not just from an investment perspective, but across all aspects of our lives.
Here I will try and sift through some of the noise that is circulating and provide perspective on what we should be trying to focus on as investors.
The coronavirus lockdown has filled our screens with frequent data updates and lots of possible scenarios and consequences.
As we all sit under quarantine, with a 24/7 news and social media cycle, many of us will be watching for every source of data to help point us towards signs of hope - a flattening of the pandemic curve that may eventually point towards an end to this, or at least a sense of how long it will continue.
It can be a lot to take in and it is easy to misinterpret or perhaps over-interpret the incoming deluge of statistics – and this goes for the investing world too.
This information overload can be exhausting, particularly when most of us are already juggling a lot of competing pressures.
It may seem difficult to step away from your phone and desist from seeking out the next “global update” or “economic prediction”.
However, as an investor, a great deal can be gained from taking a step back and treating the reported statistics and possible scenarios with caution.
At times like these, for those who are fortunate enough to be concerned about market moves and the long term, we’d advise staying calm and not making any rash moves when it comes to your investments. The market will likely see further rises and falls as the pandemic continues, so it’s best to go back to basics and focus on the long term.
For those who are looking to get into the market, the same principles apply and, once you’ve committed, it’s worth sitting tight. For those trying to time the dip and invest at a low, it’s worth noting that the market will often price in potential outcomes in advance and so it’s a very difficult game, with most people missing the boat.
A more balanced assessment of the risks from here, both positive and negative, will likely see equity and credit prices, as well as government bond yields, materially higher in six to 12 months’ time.
Remember, the value of investments can fall and as well as rise; you may get back less than you invest. If you're unsure about investing, seek independent advice.
Claire McCombe is a wealth manager with Barclays Wealth & Investments.
