The broad-based S&P 500 has posted its quickest plunge in history. In six days, it has fallen more than 10 per cent from its record high. Australian shares are set for their worst week since the global financial crisis. The benchmark index has plunged about 10 per cent, wiping off about $240 billion in value, since the market hit a record high on 20 February 2020.
We are seeing a major correction on all global markets, as everyone is trying to understand the impact of the coronavirus. Markets have been at record highs and were quite jittery and very sensitive to any bad news. You could argue that they were overvalued due to investor optimism backed by continued world growth. It remains unclear how much the coronavirus will impact growth, although the Economists at Vanguard expect it to be impacted by 0.15%, roughly $135 billion. They also believe that the real net effects won’t become clear for another several months.
Chart demonstrating how investors reacted to epidemics, showing that the long term is positive.
We remain focused on long term goals and find assurance that our portfolios are well balanced across various asset classes and diversified in each. We are closely evaluating how these compare to their benchmarks, which we believe are going to weather the correction better compared to passive investment options.
How are your investments fairing in these uncertain times?
Call us today to see how your investments compare and what we can do to assist.
Brad Tuppack is an Authorised Representative (AR# 461168) of Crown Wealth Group (AFSL 494274)
Trading as Key Financial Advisers Pty Ltd ATF Key Financial Advisers Trust (ABN: 43 843 934 542)
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