Over the last month or so Coronavirus has spread worldwide, with many countries including the UK taking the wise step to severely limit contact between people. This will hopefully succeed in slowing the virus, but at the same time will unfortunately cause economic uncertainty and financial difficulties for many.
For some this may mean the loss of their job, or their business having to close. Many others will have seen their pensions or investments decline in value as a result of the negative impact of the virus on the stock market. There is of course some help out there – from mortgage holidays to ‘furloughed’ wages and low remortgage interest rates – but these may not benefit everyone.
A market reaction to an epidemic is nothing new – in recent years both Zika and Ebola resulted in falls for example – but Coronavirus does seem to be much larger in its impact. At the time of writing the markets had seen a sharp decline followed by a small rise. By the time of publication the markets may have improved further or they may have fallen again.
The conventional wisdom with investments and pensions is that they are long-term strategies and over time will absorb short term fluctuations such as this. Indeed with previous epidemics the markets have recovered fairly quickly. A knee-jerk reaction to selling investments after a sudden fall can be detrimental as it crystallises any losses. Likewise, many confident investors actually see opportunities to grow their money when stock markets are low.
Either way, having the right investment and pension strategy in place is essential. This starts with ensuring where your money is invested matches your capacity for loss, attitude to risk, need to access money in the short-term and your investment experience.
If you’ve got any questions about the impact of Coronavirus on your pension or investments, an independent financial adviser will be able to help you. Contact Beacon IFA for a free, no-obligation initial consultation – our advisers are able to offer a full advice service remotely over the phone and online.