Market Update – 30 April 2020

Please see below for analysis of what the recent global developments has meant for the financial markets. There has been a recovery in recent weeks which was a welcome boost to investment values.

If you have existing investments or pensions you should be reviewing how these are invested and performing at this stage. A properly managed investment portfolio should be able to limit losses in volatile times and excel in the upturn. You should also be carefully assessing the amount of risk that you are taking with your investments and ensuring this is in line with your objectives and requirements.

Any person in a position to invest capital should also be assessing the opportunities available, as fund prices are low and there is greater value in new investments now.

If you would like a free consultation, including analysis of your current investments, please contact us to arrange a call with one of our advisers.

Market Movements and Outlook

Markets have continued to recover over the last couple of weeks, meaning a significant proportion of losses have now been regained (approximately half for mixed-investment portfolios). Central banks globally have used quantitative easing to inject more cash into economies and this coupled with the robust financial support from governments in major countries has led to investment flowing back into global stockmarkets and bonds. Oil prices have fallen dramatically but an agreement to cut production has started a slow recovery, although the upside would appear limited until such time demand increases (as economic activity begins to bounce back).

The global market outlook is still positive for the long-term and once we have more plans announced on easing lockdown and the structure of economic recovery, we will be able to more accurately predict short-term prospects.

Below are the mixed-investment sector performance graphs and tables to illustrate the long term position:

(information gathered today using FE Analytics – 5 year and 3 month performance graphs shown and 10 year performance table shown – prices as of close of yesterday)

UT Mixed Investment 0-35% shares (blue) = Cautious to Moderate Risk

UT Mixed Investment 20-60% shares (red) = Moderate Risk

UT Mixed Investment 40-85% shares (black) = Moderate to Adventurous Risk

3 month performance chart

 

 

 

 

 

5 year performance chart 

 

 

 

 

 

 

10 year performance table

 

 

 

 

 

As you can see from the table and graphs above, all these mixed-investment sector averages are now showing growth over the past 3 years, with the April recovery putting investment portfolios in a better position.

We understand that lots of businesses and income have been affected by the lockdown in this country, and as such you may need to access investment capital in case of emergency. While selling and withdrawing monies when markets are down is not normally advisable, we understand in some instances there may be no other option. You should also note the well-publicised government support in place, such as grants, subsidies and loans on favourable terms (borrowing can be very cost effective with interest rates so low).

If you would like further information or advice then please contact us via email to request a call.