The Golden Rule:  If you are investing for the long term, sit tight.

What a scary and strange time this has been. We have moved from a fully functioning society to one that is pretty much in lock down. I don’t think there are many who could have predicted this one.

We have seen significant swings in global financial markets as a result of fears over the spread of COVID-19 and the containment measures being put in place.

At the moment we still don’t know the true scale of the virus outbreak, and whether the containment measures are effective. Of course, other factors are also atplay and even though markets can rally, it is likely you will see values go up and down quite a bit over the coming weeks.

History tells us that stock markets recover from even the worst of traumas; not least the First World War and the Spanish Flu epidemic; the Wall Street Crash and the Great Depression, followed by the Second World War and most recently the Technology Boom, 9/11 and the Credit Crisis. Regardless of all of those different events, shares have always bounced back and outperformed every other financial asset. After taking account of inflation, UK shares have produced an average annual return of 5.5 per cent a year since 1900.

It is essential to remind ourselves that investments are long term and to look beyond. It is normal for the value of investments to go up and down.Although not guaranteed, history does show us that values generally go up over the longer term, despite this short term volatility. Making decisions based on what’s happening in the short term can be a risky. It might be tempting to move investments into cash for a while – but in doing that, you might miss out on the point when the value goes back up – so you could lose out in the long term.

It is expected that the stock markets will remain volatile for some time and it is likely to get worse before it gets better. However, I believe in the resilience of our capitalist system. And I have absolute faith in the creativity and the sheer dogged guts of companies not to fail.

So now for the Positives!

• In the last few days markets appear to have stabilised.
• Governments across the world are prepared to throw the kitchen sink at this. They recognise this is short term and they want economies and companies to immediately bounce back.
• Banks are in a stronger position than ever to assist the economy in its recover and in particular to assist companies with any short term liquidity requirements.Liquidity is always king.
• We have all of the Worlds top medical experts working towards every possible solution!