Is the Novel Coronavirus infecting your investments?

Is the Novel Coronavirus infecting your investments?

By Peter Dine, 10 February 2020

 

The news is currently dominated by the Novel Coronavirus (2019-nCov), and understandably so. It’s a highly contagious disease reportedly killing more than 800 people to date, mostly in mainland China, and the number of people infected continues to grow with little sign of abating yet.

Investment markets don’t like uncertainty and the market reaction to the spread of the Novel Coronavirus has been swift with most markets around the globe initially falling. Whilst very unsettling, this event is not unprecedented. We’ve been here before. Remember SARS in 2002/2003? It was less contagious but its mortality rate was much higher. However, each situation is different and one such factor this time around is that China makes up a much larger share of the world’s economy and global trade. In the short term, this could be negative for industries such as airlines and tourism and also for commodity prices. At the same time, some sectors such as healthcare may benefit from the outbreak.

Harbour Asset Management, a fund manager represented in many of Saturn Advice’s client portfolios has written a very good article on the Novel Coronavirus which you can read by clicking the link here.

We remind investors markets are continually responding to news which could affect corporate profitability and economic growth. This creates volatility in markets. Patience is a virtue and looking through short term volatility and focusing on the longer term is all part of investing in equity markets. For investors who have been invested in the markets for a while, this part of the investing journey.

The fund managers Saturn Advice uses are continually analysing large amounts of data and using this information to make decisions on assets to hold in their funds. In this respect, market volatility creates opportunities for active fund managers to buy (or sell) assets that in their view have been mispriced by the market.

If you are concerned about how the Novel Coronavirus may be impacting your investments, get in touch with us today and talk to one of our financial advisers.

The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate personalised financial advice from a qualified Authorised Financial Adviser to suit your individual circumstances.



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