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Investment Market Sell Off Continues, driven by Coronavirus

The effects of Coronavirus on people, families and businesses are nasty, tragic and worrying.  Naturally, we have been following the position very closely via the financial media (Bloomberg mainly) in order to remain up to date with the situation.  I, along with some friends, were recently skiing in the Italian Dolomites, travelling via Venice.  If I were expecting to travel this week, I would postpone the trip …..  That being said, I am personally driven to buy rather than considering selling, as a long term investor, although I am also not sure that the bottom has arrived as yet.

Sectors which offer value for the long term are the target.

Sell off – approaching correction

This market ‘sell off’ has happened rapidly this week when the Global Markets (Asia excluded) were mindful – but generally less concerned about the impact of the virus, up until the end of last week.

Asset Allocation

The benefit of gathering professional ‘independent financial advice’ provides an outcome of building a balanced portfolio – suiting an investor’s needs and objectives, holding a mixture of asset classes.

The balance of holding a mixture of asset classes in the ‘Best of Breed’ funds is essential so when shocks to asset classes develop the diversity of equities, bonds, commercial property, gold, commodities, cash and other assets produce a risk managed outcome.

This is the ‘value add’ of using a professional, experienced adviser.

Of course, investment market shocks are not pleasant but the important issue is to ‘look through’ short term corrections, focusing on long term objectives – considering if there is a fundamental structural change …..

In a speech yesterday, President Trump stated that the ‘risk to the US is very low’ but, of course, the virus hasn’t rapidly spread to the region as yet.

The picture presents no clarity as yet, in relation to the spread of the virus so the business impact is yet to be truly understood but initial estimations are up to 2% off China’s GDP expectation.

The question in relation to a V shaped or longer U shaped recovery depends on the solution to balancing the economic impact and producing containment leading to eradication

An article in Investment Week highlights Warren Buffet’s views on the position.

Click the link to read the article:


A balanced objective and factual view is essential at these times.

An article on Bloomberg (yesterday) pointed to the Fed potentially producing further stimulus in the form of rate cuts – supporting economics, which would be a literal ‘shot in the arm’ for markets.  Central Banks are clearly ‘waiting’ to understand how their respective economies are needing support prior to taking action presently.

What is the Coronavirus and where did it start?

Coronaviruses are a family of diseases which include the common cold and the virus which caused Severe Acute Respiratory Syndrome (SARS), which originated in China in 2002 and killed nearly 800 people around the world.

The virus causing concern now is a new strain which has made the jump from animals to people, named Covid-19.  It causes fever and a cough and can make it hard for people to breathe, causing viral pneumonia in severe cases.

Over 2,700 people worldwide have now died after contracting the illness.

The virus is more likely to progress into a severe illness or prove fatal among older patients or those with weakened immune systems.  As it is a viral illness, antibiotics will not help and there is no known cure or vaccine.

To avoid the illness, take usual hygiene precautions, such as using a tissue to cover coughs and sneezes, and making sure to wash your hands.

Do not touch your eyes, nose or mouth after touching things like poles on public transport and avoid close contact with people suffering an acute respiratory infection.

You should also avoid unprotected contact with wild or farm animals. So far, 13 cases of coronavirus have been confirmed in the UK. Hundreds have been tested for it here, with most of the tests coming back negative. How many people in the UK have it?

The virus originated in the city of Wuhan in China, where it is believed to have made the jump from animals to people at a seafood market.

Wuhan is the capital of China’s Hubei province, a landlocked province in central China.

It is built along the Yangtze river, and is around 500 miles west of Shanghai and 690 miles north of Hong Kong.

It is the largest and most populous city in central China, although estimates over its population vary. Some schools have closed, while others have sent pupils home, amid worry they may have been exposed to the virus during ski trips to northern Italy.

Public Health England (PHE) says it is not advising schools to shut.

British Airways has cancelled some of its flights to Milan because the coronavirus outbreak had resulted in ‘reduced demand’.

The World Health Organisation has confirmed more cases are now being reported each day outside China than inside.

Reports show that 411 patients were diagnosed in China on Tuesday, while 427 cases were recorded outside, amid a worry outbreak in Italy.

The above is a brief synopsis about the Coronavirus; for more detailed information please click on the following link:


I hope the article helps provide some context from the leading Global long term investor – the Sage of Omaha – Berkshire Hathaway, CEO Warren Buffet.

Best Wishes.

Richard and the Best Price FS Team