DFMs tell twitchy clients to stay calm over coronavirus

After two months of constant coronavirus news, financial markets have only recently started to react more strongly. The FTSE 100 index lost £ 62bn on Monday.

The proliferation of cases in Europe, the Middle East, and Asia, as well as the cancellation of technology conferences in San Francisco, Serie A football matches in Italy, and a rugby match by the Six Nations in Dublin, could have triggered the event.

The latest corona virus, also known as covid-19, may have scared nervous investors, but the message for financial advice clients is to stay calm.

Extend short-term market noise

"Don't try to time the markets, don't be a forced seller," said Phil Billingham, director of Perceptive Planning portfolio advisorsister title International consultant,

Patrick Connolly, Head of Communication at Chase De Vere, says: “Our great advice to customers is not to panic

“We operate customer funds on a long-term strategic basis for asset allocation. This means that we manage risk by keeping a number of different asset classes in the right proportion to meet the needs of our individual clients. "

He adds that the company has not been contacted by many customers, which it considers "a positive sign".

However, Chase De Vere's advisors "proactively contacted their clients" to "calm their thoughts and remind them of the long term nature of their financial plans and investment portfolios."

“We are not making any significant changes to our clients' investment portfolios. We want to eliminate short-term market noise and sentiment and concentrate on making rational long-term decisions. "

Pandemics delay global demand, they don't destroy it

There were fears that trade could collapse because companies could not meet the demand for goods and services.

David Gibb, financial planner at Quilter Private Client Advisers, remains optimistic.

"It's worth noting that" pandemics "don't really destroy global demand. They just delay it," he says.

“There have been nine major outbreaks since 1998, and although all have caused short-term economic disruptions, the impact on long-term fundamentals of investment has been limited and economic growth has subsequently resumed.

“Of course, the past cannot predict the future, but it should encourage investors to focus on long-term fundamentals when assessing investments after the epidemic breaks out. "

The IFA Tenet network has told its customers that if they "disinvest or delay investment decisions due to market downturns caused by the corona virus, they risk missing out on long-term growth."

Support China as attractive for non-invested money

The epicenter of the outbreak, China, has suffered a financial blow in the past few weeks. However, one company believes that at the end of the investment tunnel there is light for the country.

Michel Perera (picture), Chief Investment Officer at Canaccord Genuity Wealth Management, says: “The current panic may not last long and should provide attractive entry points for non-invested cash.

"It is a risk to sell and to hope to buy back at the right level – the tour is not worth it. And we believe that thanks to the great Chinese stimulus, the markets will recover.

“We are starting to see a slight change in balance. When it was reported that there were more cases outside of China than inside of China, the markets responded and we saw a strong rally in Chinese stocks as other markets fainted.

"You can be sure that when the virus is there and the Chinese consumer is on the move again, we will see a" Beijing bazooka "that is an incentive for the world's second largest economy."



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