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Coronavirus Macro Brief

Here’s our investment consultant’s (and TCFP’s) view on the coronavirus in relation to your beautifully-diversified investment strategy: MB Coronavirus Special

And now for my more personal thoughts on the matter.

If you have previously heeded my advice to never read nor listen to the financial press, then you need read no further. You’re fine, you know you’ll be fine, and it’ll be Summer soon enough.

But I understand that some of you just can’t resist, so here’s your spine-stiffening restorative tonic, expressed as simply as I can.

As the new strain or coronavirus spreads, the financial press will invite you to doubt the viability of the world’s economy and the 8,500 or so companies that you own a bit of.

In particular, they will want you to sell those excellent, massive, financially strong and profitable companies before your “losses” get any worse.

This is palpable hogwash.

Please understand that I have no idea how far this outbreak will spread or the lives it will claim before it is brought under control.

I am reasonably certain that many of the world’s leading virologists and epidemiologists are working on it, and I believe their efforts will ultimately succeed. The history of similar outbreaks this century makes this a reasonable hypothesis:

  • SARS in 2003-04, also originating in China;
  • The bird flu epidemic in 2005-2006;
  • In 2009, a new strain of swine flu;
  • The Ebola outbreak in the autumn of 2014;
  • The mosquito-borne Zika virus outbreak in 2016-17.

The super-spreader of SARS – a fish seller – checked into a hospital in Guangzhou on 31 January 2003, basically infecting the whole staff. The epidemic exploded from there.

On that first day of SARS, the S&P 500 in the US closed at 855.70, and the FTSE All-Share at 1722.28.

17 years and six epidemics later (including the current one), this past Friday the S&P 500 is up nearly 277%, the FTSE All-Share is up 135%.

Either which way, you are likely to see larger ups and downs in the values of your portfolios. This is to be expected and accepted. I absolutely know they can be unnerving, but there’s nothing to worry about. Sooner or later the unstoppable long-term upward trend will reassert itself.

In the short-term your needs are covered either by cash held in your portfolio and/or income – there’s enough there to see you through the best part of three years; that should give you huge comfort.

But, as always, please feel free to get in touch with any concerns (or upbeat messages) you might have -, we’re here for you whenever you need us.

In the meantime, the most helpful (and heartfelt) investment advice I can give would be that you turn off the TV.


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