Market Update and Link to Economic Commentary

Through uncertainty and fear of the impact of the COVID-19 pandemic, financial markets sold off heavily in the third week of February 2020.  Initially shares, being the most liquid and volatile were sold.  Investors bought bonds with some of the cash, pushing up bond prices.  But the bonds were subsequently sold too and behaved like shares, because there were fewer buyers on the other side.  Both share and bond prices fell sharply in March.  In that situation, cash is king.

Investors in sound multi-asset managers’ products were not protected completely; some suffered sharp falls in value.  However from a governance stand point it was helpful to know that the managers were managing the most abrupt market down turn in living history, while countries and people wrestled with combating an unexpected threat to both life and the way they live.

Now that markets have stabilised to some extent as central banks and governments focus their efforts on survival and then their economies, active investment managers are finding selective stock picking opportunities as markets recover.  Having wider ranges also helps in asset allocation.  There is more volatility ahead but light at the end of the tunnel.

We trust you find this month’s economic commentary of some interest. Click here to download the full PDF.