It’s important to remember that although it may seem difficult, now is the time to try and stay calm when it comes to your investments. There is no disputing the financial impact of the Covid-19 pandemic – it’s affected individuals, businesses and entire industries across the country, and despite previous coronavirus outbreaks in Asia such as SARS in 2002, it is different to anything we have ever seen before.
Today, time appears to have been divided into “before” and “after” the coronavirus outbreak. “Before” refers to the old normal, and “after” is defined as the new socially distanced reality we are now coming to terms with. Financially, these two eras are visible in the global stock markets, most of which fell sharply in March as the virus began to spread across the world. This outbreak led to lockdowns in most countries, including the UK, causing a clear decline in economic activity.
There have been many conversations about whether life as we knew it has now changed forever. These conversations are also taking place around the investment world. The scene has altered, with increased volatility in the values of investments, while businesses have reacted differently to the environment, with many reducing dividend payments.
Taking a long-term view
It’s important to remember to take a longer-term view. Previous crises, such as the financial crisis of 2007/2008, the 9/11 terror attacks and even the stock market crash of 1987 felt momentous. Now, with the benefit of hindsight, you can understand that these may even appear as little more than dips on a long-term investment strategy. Investors who stayed with their existing strategies did suffer in the short-term, but they benefitted in the long-term, whereas those who sold up what they had then faced the difficult decision on when to reinvest.
This long-term strategy works alongside investment diversification. A financial planner can support you in creating a diverse portfolio with investments that are spread across many different assets. In having a diverse portfolio, you are better protected when one of your assets takes a loss. By minimising the risk, even during times like the coronavirus pandemic, you can have a clearer view of your finances and the future.
Ethical and responsible investing
The change in the financial backdrop has also highlighted the importance of sustainability within the investment industry. Financial markets do not exist in isolation from social and environmental challenges, and this fact is clearer today than ever before. These challenges and investment drivers appear to be overlapping, which has led many people down the path of ethical and responsible investing.
Ethical and responsible investing is the investment strategy in which you apply your values to your portfolios. This means that you would only invest in products that not only suit your financial goals, but those that are also in line with your morals and principles. Over the last few years, the processes involved with ethical investments have evolved considerably and the coronavirus pandemic appears to be making more waves in the ethical investment ocean.
KLO Financial Services
Whatever you decide to do with you investments, our investment management service can support you in becoming financially comfortable. Our team of experts, with many years’ experience in investment analysis and financial planning, will discuss and analyse your assets, objectives, and risk tolerance to design a portfolio that gives you confidence and control. Call us today on 01926 492 406 to find out more.