The contagion of the coronavirus has resulted in widespread panic in global stock markets even with government and financial support packages from leading nations.
Unfortunately, due to the nature of the market fall, i.e. drop of over 30% in less than a month, the sensible approach will be to ride out the current storm and not de-risk portfolios.
However, volatility is going to remain, and further drops might occur but timing the market isn’t going to be easy.
Therefore I’m not advising clients to take money out or reduce the equity content of portfolios as you may miss out on any market rebound in the future.
Portfolio Performance Year To Date (YTD)
The performance figures above are based on the fund and asset allocation of portfolios being rebalanced on 1st January 2020. However, portfolios are holding more cash than usual as detailed below: –
Cash 22% – Cautious Level 3 (YTD Performance -5.20%)
Cash 12% – Moderate Level 4 (YTD Performance -8.50%)
Cash 8% – Balanced Level 5 (YTD Performance -11.00%)
Therefore portfolios will likely need to be rebalanced to increase equity exposure at some point soon.
The information provided in the update is for existing clients invested with PWS Southport.