Whichever news article I read or hear at the moment, the word unprecedented is featured. I’ve seen some highlight the fact it’s being overused and everyone is aware that the current global crisis we find ourselves in as a result of COVID-19 has never happened before.
But it perfectly describes the situation. We have not experienced such economic downturn, travel restrictions and social limitations in living memory. It is, by all accounts, the textbook definition of unprecedented.
I’m writing this piece today first and foremost as a member of the British public. There is a considerable amount to discuss - or perhaps speculate is a more appropriate word - around investments and financial markets, but the health and wellbeing of you, your family, your friends and us a global community needs to come first.
Without our health, we have nothing. I urge you to stay safe and follow the latest government advice - which is being updated almost daily.
Yet I am acutely aware that for investors of every kind, there is a lot to be looking at right now. Just a few short weeks ago, many investors were looking at ensuring they had maximised their ISA contributions for the year ahead or how they could adjust their SIPP holdings to increase their output.
Now many are in a position of complete uncertainty with the Coronavirus pandemic resulting in the FTSE 100 marking its worst quarter since 1987.We have never seen a sustained drop of such magnitude in the history of the FTSE. Not with the financial crash of 2008. Not with the terror attacks of 9/11. Not as part of Black Monday in 1987.
But we will recover.
As a country. As an economy. There will come a point where we start to see increases in the markets; improvements in our investments. Some predict it could be early as the summer as we continue to make progress with a Coronavirus vaccine. Others say 18 months, the point at which we are likely to have some form of public-ready vaccination process. Others suggest longer.
But recovery happens. It always does. Understanding this, if we break it right down as investors, we have two options - to sit tight and ride it out, or get out of the market and reenter at some point in the future.
It may be a particularly simplistic way to look at things, but that’s sometimes needed. There is an immense amount to think about in every aspect of life right now. Breaking down our investment options to such a level can make it more manageable and allow us to focus our attention in other areas.
What’s important for me to get across personally is that whilst the entire world is going through radical change and drastic measures to combat the biggest enemy we have seen outside of peacetime in over a century, we’re doing it together. We aren’t alone, either as individuals, organizations or industries.
The whole of the country is combining forces; collaborating and working jointly in a way that hasn’t been seen since the Second World War.
A focused approach to success
It will never not make me feel completely indebted to our health service when I read how 4,500 retired nurses and doctors have come out of retirement to work in hospitals throughout the country. These retirees are, simply put, helping limit the number of people who are so unfortunately succumbing to COVID-19. I can’t express my personal gratitude enough to these people who are rejoining our fantastic NHS. They didn’t have to. They could stay at home, isolated. But they wanted to.
Separately, I read an article recently that detailed how chemical company Ineos are building a brand new plant on our local Teesside that will be able to produce one million bottles a month of much needed hand sanitiser.
They’re going to do it within 10 days - and the sanitiser will be provided free to the country’s front line medical staff whilst simultaneously supplying the immense demand amongst the public.
I honestly can’t recall any comparable story in recent history.
The tight knit work of our supermarkets has been nothing short of astounding, too. Their messaging has been perfectly aligned to assist with curbing panic buying. Sharing vans, stock and staff is becoming the temporary norm. For an industry that is notorious for high competition and potential for monopolistic practices, it’s a perfect example of how the rules have changed. We aren’t competing against each other anymore. We’re battling against the virus.
I’ve even seen many reports of people being inspired by the Second World War’s ‘Dig For Victory’ campaign, setting up their own vegetable patches at home to ease any potential stress on the country’s supply chain later in the year. A quick look at Google Trends (a site that shows the level of interest from Google searches on a specific topic overtime) and we can see a five fold increase in interest around growing phrases from the first week in March to the second, going far beyond any seasonal growth patterns.
People are being selfless. In a world where there’s so much negativity spread, this level of selflessness and respect for those around us who we have never even met - nor likely ever will - is astounding.
Things will get better
The global COVID-19 pandemic is causing a lot of uncertainty in every sense right now - not just financial - and the experts have explained we haven’t yet reached the peak of the pandemic.
As such, we should expect markets to drop further and for industries to continue to feel the strain. We should expect for the current social distancing and isolation measures to be extended or restricted further. We aren’t in for an easy ride.
But we will recover. There is little doubt about that. We don’t know when, but we know it will happen. There have been many similarities to the current measures being very close to those in wartime - and if we can come out of that and remain as one of the most robust economies, societies and nations in the world, we can do so again.
The CARLTON Bonds product is available exclusively to experienced investors who are classified as either sophisticated investors, high-net-worth individuals or professional investors and have the knowledge and experience to make their own investment decisions. Investments are high risk and illiquid, your capital is at risk and returns are not guaranteed. Bonds are not protected by the Financial Services Compensation Scheme (FSCS).