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As the coronavirus continues to spread around the world, fears of its impact on the global economy have, in recent weeks, contributed to market movements.

Human nature is such that, during these periods of uncertainty, we can start to doubt our investment strategy. It is easy to be drawn into the endless cycle of news and make hasty investment decisions due to a desire to take action or limit exposure to risk. However, unless your investment goals have changed, the best response to volatility is to do nothing and instead focus on your long-term objectives.

Clearly, the outbreak of COVID-19 is a developing story and there is likely to be more volatility ahead. With this in mind, I’d like to take this chance to highlight our approach to investing through these kinds of crises.

  • Volatility is a normal part of investing and historical evidence suggests that, in the long-term, stock markets are likely to rise. 
  • Research shows that investors who trade in and out of the market can lose out. Between 1999 and 2019, the UK stock market returned an average of 4.8% a year, not taking into account investment fees. If you had missed the ten best days over that period, your return would have been just 1.7%.

Past Performance is not indicative of future performance

  • Our fund managers do not substantially change their process or portfolios in response to short-term volatility because it does not typically alter their long-term investment ideas.
  • St. James’s Place is in frequent contact with our fund managers and they are constantly monitoring markets to make investment decisions that are in the long-term interests of all clients. Some managers believe the market losses have created buying opportunities
  • The team at St. James’s Place will be posting frequent updates and reflections on the ongoing economic impact of the coronavirus at www.sjpinsights.co.uk.

Please do get in touch if you have any queries and I would be happy to assist you.

Yours sincerely

Michael Sage

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

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