Coronavirus Implications – Investment Update

Global markets tumbled for a sixth consecutive day to Thursday 27 February, dragging down the S&P500 (main US equity market) more than 10% in just a week, reflecting rising fears over the coronavirus that is spreading quickly around the world.

What does this mean for you, and should you be concerned?

The recent outbreaks of the virus will only add to the uncertainty and significantly widen the range of outcomes for global economic growth. If the downward trend of new cases in China continues, Chinese authorities may loosen restrictions on business in those provinces deemed less at risk of spread, enabling economic activity to resume. Economic data is likely to be very soft in February, however it may stabilise in March before ultimately returning to normal in April.

It’s important to understand your investments and the level of risks involved. The volatile nature of markets continues to be a reminder of the benefits of diversification and maintaining a focus on the longer term. News reports on changes in market performance can prompt concerned investors to check savings balances and change funds without considering long term trends. Here are some ways you can be confident your investments are working the way you want.
 

1. Do you know what investment option your money is invested in? The Scheme offers four investment options. Three of these, Conservative, Balanced and Growth, are diversified funds. This means they invest in a variety of assets such as shares, property, bonds and cash, although in different proportions. The fourth option, Cash, as its name suggests, invests only in cash. Make sure you know what investment option you are in and the impact markets may have on returns.
    
2. Have you spoken with an expert? Financial advisers can help you make the right investment decisions. The right financial adviser can save you time and help you achieve your retirement savings goals. If you are concerned about the markets, considering changing funds, investing more money or perhaps withdrawing some of your savings, then speaking with a financial adviser can help refine your goals, and provide tailored advice for your specific situation.
    
3. Need to withdraw money in the near future? If you are looking to buy your first home or are thinking of withdrawing your money for retirement, it’s important that you understand that the value may go up or down with the market and allow for that.