WILL CORONAVIRUS KILL YOUR PORTFOLIO?

Q4 Market Update




2019 market overview

John Butters - Chief Investment Officer
2019 was another good year for global stock markets. The year began with a sense of pessimism that the upward trend could continue, but equities rose 22% in Sterling terms. UK government bonds, in spite of the unremitting scepticism of professional investors, returned over 6%.

Coronavirus - will it impact markets?

Much of the media comment at present is focused on the coronavirus. New Scientist magazine went into some detail in its early February issue.. The virus, unlike some, does not peter out after infecting a few people; some cases are mild which means quarantine is difficult; and actual cases may be 10 to 40 times the confirmed number. New Scientist argues that a pandemic – which is to say, a disease outbreak that spreads worldwide – therefore seems likely.

Previous pandemics

That would have a terrible human cost. But important events in human terms often have a surprisingly small effect on markets. Let us look at stock market behaviour during pandemics of the past. The worst modern case was the Spanish flu outbreak of 1918. The UK stock market rose strongly in both 1918 and 1919, thanks to the end of the First World War. During the Asian flu pandemic, the UK market rose in 1957, helped by the end of the Suez crisis, and had a remarkable year in 1958 as interest rates were cut and wartime restrictions on companies were finally relaxed.

At the time of the Hong Kong flu pandemic, the UK market had another outstanding year in 1968 as interest rates were cut during a consumer spending boom; it had a modestly bad year in 1969, but that probably had more to do with a credit squeeze and the need to arrange a lending facility from the IMF. The H1N1 flu pandemic of 2009 coincided with the strong rebound in markets after the global financial crisis. Overall, it seems that pandemics, awful as they are, have not necessarily hurt equity returns.

Our long-term outlook remains positive

In my commentary at the start of 2019, I said that the market is prone to bad moods that often do not last. 2019’s returns are a case in point. Markets may, or may not, wobble over the coronavirus. That makes no difference at all to our expectation of good long-term returns.

JOIN WEATHERBYS PRIVATE BANK

If you are looking to become a client of Weatherbys Private Bank, please click here to register your interest in our services.

BECOME A CLIENT

HOW TO RETIRE AT 60

February 2020
So, you want to retire at 60? David Stead, Senior Private banker, explains why you need a cashflow plan.
With the average lifespan lengthening and the age at which the state pension can be claimed rising slowly but steadily, retiring at the spritely age of 60 now seems achievable in a way that perhaps it didn’t a generation ago.

READ MORE
Cash Flow Planning

THE IMPORTANCE OF CASH FLOW PLANNING

When it comes to planning for the future, most people tend to focus on one thing: building as much wealth as they can. This is vital, of course. If you want to meet your financial goals, then saving and investing wisely is absolutely fundamental.

The Weatherbys Investment & Wealth Advice service will help you build a cash flow plan to ensure sufficient income for life.

READ MORE

LENDING

At Weatherbys, we take a personal approach to lending, creating tailored, flexible mortgages and bespoke lending solutions to meet your needs

DEPOSITS

At Weatherbys, we take a reassuringly conservative approach to managing our balance sheet going above and beyond industry standards to ensure your money is safe and secure.

INVESTMENT & WEALTH ADVICE

We go above and beyond to help you achieve the very best financial future.

Important information

The information contained in this article does not constitute financial advice or a personal recommendation.  Past performance is not a guide to future performance. The value of an investment and its income can both increase and decrease and you may not get back the full amount originally invested. The value of overseas investments will be influenced by the rate of exchange.