A tough week that may turn into a very tough month though advisers will be hoping that the market bounces back. IFAs tell New Model Adviser that they are pushing ahead with client meetings despite the virus – that was dated 13th March. I wonder if this will change soon as things are moving fast.
The virus has struck at least one UK insurer. Aegon UK has shut its HQ after one case. Note also that FTAdviser at least suggests advisers are taking to Skype for client comms.
I do think we still lack an overarching explanation for what is going on in markets. But maybe it’s a little early to really understand beyond the virus. We will surely see some very stressed sectors and pockets of illiquidity begin to emerge swiftly.
Investment Week’s market movers blog reports the uptick on Friday. This is a very useful feature during these troubled times as we get a day by day and usually a market opening and market close update.
It charts the bearish week. It does seem like an age ago that Saudi Arabia’s decision to pump oil caused markets to tumble on Monday. Given other news, this trigger may prove rather irrelevant long term
I would rarely link to sponsored copy, but this is PIMCO writing around a fortnight ago about Covid-19. The views on China and Asia seem very useful. Advisers may unfortunately wish to note that the Asian economic impact hasn’t made it into the data yet.
Market doomster Nouriel Roubini warns about a credit crash and recession on Bloomberg. I mean no one was expected sunshine from Doctor Doom.
Bloomberg Opinion even suggests that the US may need a market shut down.
There was a budget last week although it too feels like ancient history.
The Chancellor of the Exchequer Rishi Sunak presented a very active budget with £30bn of immediate boost for the economy, several emergency measures and longer term billions of extra investment potentially reaching as high as £650 billion. Advisers will want to note that the latter amount is the subject of some dispute with some re-announced money in there too.
Among other things, he pushed the annual allowance taper up by £90,000 taking most NHS doctors and no doubt other IFA clients out of the taper next year as Your Money reports. The junior ISA limit doubles to £9000. Entrepreneurs relief is slashed. You can now shelter just £1m from the full CGT rate.
BlackRock’s Dan Whitestone, who runs the £434m BlackRock Throgmorton Trust warns that equity income funds are demanding that UK companies pay dividends that they cannot afford. The market falls may be a crunch point.
It’s an ill wind. The Association of Investment Companies’ Nick Britton notes that locking in a reliable income just got cheaper. And yes the answer is investment trusts.
I like this column from Graham Bentley in which he suggests that advisers don’t let scepticism turn to cynicism.
He says that a lot of advisers play fast and loose with the term evidence-based especially when advocating passive investing.
I like the last paragraph but one which may have lessons beyond financial services.
“Woodford and other catastrophes should be catalysts for advisers to enjoy a healthy open-mindedness when surveying their markets, but that requires the strength of character to change your mind when presented with new information. Sneers and sarcasm are in danger of becoming substitutes for healthy scepticism.”