We’re still deep in the pandemic, this is a once-in-a-lifetime public health emergency. It’s likely to be hanging around for a while yet. In the investing world, this is called a ‘Black Swan’; something you thought was impossible until you see one.
Stock markets (humans) have acted, as we’d expect, negatively. The stock market is a story, the story changes, the prices change. Right now the story is very negative, but when the story changes the prices will change again. The stock market overreacts in both directions. This is because the markets feed off two powerful human emotions, that of greed and fear. We don’t know with foresight when the market will ‘turn’, and if anyone who tells you they do, run for the door. It’s not an untruth, it’s a lie.
The Storm is Upon Us
We’ve always told you a storm was coming, we just didn’t know when … well, now it’s here. We never leave our car during the blizzard. We wait until it passes. Be patient. Do nothing. This will pass.
We have enough to deal with through the change and disruption to our lifestyles, so let’s not compound the issue by making grave financial mistakes with our investments.
Now for some good news. Going into this crisis we could not have been in a better position economically; a decade plus of prosperity, unemployment at historical lows, businesses with more cash than they’ve ever had, and the personal balance sheets of individuals at a high. There’s never a ‘good time’ for a pandemic, but if we could have chosen a point in time, this would likely have been it. We also have a globally connected world and have all the utilities and resources to address this head-on.
Furthermore, I think the Irish response to this crisis has been powerful, effective and decisive. I am proud of the leadership shown by those at the head of public services. I believe this will see us cope as best as we possibly can and return to normality as soon as possible.
There will also be some good consequences from the crisis, such as:
Now, back to your investments and pension funds. Warren Buffett says:
“The stock market is a device for transferring money from the impatient to the patient.”
Successful investors are patient, failed investors are impatient.
Keep safe, keep positive and know humanity is a powerful force that will prevail.
As I said last week, please call us, email us, tweet us – do whatever you need to do to reach out to us. We know you are struggling with this. We know this is hugely worrying. But trust us, we know what to do. And we can put your mind at ease and let you go back to protecting your loved ones because they need you right now.
Metis Ireland Financial Planning Ltd t/a Metis Ireland is regulated by the Central Bank of Ireland.
All content provided in these blog posts is intended for information purposes only and should not be interpreted as financial advice. You should always engage the services of a fully qualified independent financial adviser before entering any financial contract. Metis Ireland Financial Planning Ltd t/a Metis Ireland will not be held responsible for any actions taken as a result of reading these blog posts.