Coronavirus, Financial Markets And Your Investments
It’s almost impossible to go five seconds without hearing a coronavirus update – whether you’re watching TV, listening to the radio, or scrolling down your news feed at home in self-isolation.
The latest update is a hard-hitting hammer blow to the global stock market as the FTSE 100 regressed again and fell back to 5.3% despite the UK government announcing extreme measures to help businesses combat the financial storm.
At the heart of this economic tumble has been the coronavirus and the catastrophic effect it’s had on the oil industry.
With global travel quickly heading toward a standstill due to the government’s recent containment measures and industrial activity lagging as staff members are sent home, demand for oil is falling. And, as a result, the stock market’s palms are sweating.
Sadly, these are the turbulent consequences of the global stock market.
Keep calm, focus on the long game
But how does the coronavirus and its impact on the financial markets impact you as an investor in stocks and shares or peer-to-peer property development? Should you be pulling the proverbial plug on all your funds?
The short answer is no.
History tells us that investors reach their goals if they remain invested, even if they invest shortly before a fall.
Here at The House Crowd we believe you should look positively to the future and avoid magnifying the importance of short term market falls. Indeed this is what we’ve always believed.
You see, it’s not the timing of your investments that’s most important. In our Invest Like a Millionaire blog we stress the importance of time in the market, rather than timing the market. In
other words, the length of time your investments spend in the market is far more important than trying to invest at the ‘right time’.
Take stock, reflect and see the opportunity
Use this period of global pandemonium caused by the coronavirus to your advantage. See it as an opportunity to take stock and review your personal financial plan. Sound financial plans are designed to soak up storms like this.
In the same way your car’s suspension is built to absorb bumps in the road, a smart financial plan is shaped to do exactly the same in turbulent financial conditions.
So, In periods like this, it’s good to reflect on whether your current personal financial plan is suitable and robust enough to withstand market volatility.
Are your investments spread across many different asset classes, or are they all held in the stock market? Have you considered spreading your funds across secured property-backed peer-to-peer loans to compliment your stock and shares portfolio?
Spread your risk and restructure your funds across multiple markets. The House Crowd’s auto-invest tool allows you to do just that, by automatically spreading your investment across many different peer-to-peer, development and bridging loans with target returns of up to 7% p.a.
Every economic cloud…
The current fall in values can create opportunities to invest at significantly lower levels for long term investment, especially into pensions, ISAs and Innovative Finance ISAs like ours, but remember you only have until 5th April 2020 if you’re looking to get your ISA in better shape.
It also presents an opportunity to make changes to your planning whilst values are lower, such as moving assets into more tax efficient structures or transferring assets to the next generation or into trust structures at lower values.
Is your family protected?
A key component of smart financial planning is protection, not just for you but for your family.
A particularly pertinent concern of many right now is the impact of the coronavirus on public health and the potential loss of household income as the economic squeeze puts businesses under extreme pressure to pay staff wages.
There are many different policies available to cover loss of income, critical illness and life. We believe now is a good opportunity to review your current arrangements and ensure you and your family have the appropriate levels of cover in place.
With the current situation, we believe protection pricing may also increase over the next few months and so it is valuable to get cover in place at current levels if possible.
If you or a member of your family would like to review your current finances and investments to see how you may be able to take advantage of the current market conditions then please get in touch with The House Crowd to see how we can help. Our member support team will be happy to help. [email protected]