The Caronavirus is having effects right across the board; the obvious health concerns, FlyBe going under, and people fighting for toilet paper.
Predictably the world’s stock markets took a hefty tumble, as shown above for the FTSE 100 (which hit 7600 a few weeks ago).
This is where investors are made or broken. Panic and sell, and you guarantee losing money. Sit on your hands and ride it out, and it’s almost certain it will recover to where it was.
Or, take a punt and buy while it’s low. Consider it a 15% discount. I don’t have quite enough faith to put lots in, as if the virus gets much worse it could take quite some time to recover. It may not even be this year. I have though put about another 10% in.
So, I should have bought gold?
People generally include gold in their portfolios to hedge against stock market shocks. I this case gold went down at the same time, so that plan didn’t work too well!
Predictably bonds did go up (my Vanguard international bonds fund is the only item in my portfolio not currently in red!).
When things settle down I shall consider moving some funds from shares to bonds, so have a better hedge for future wobbles.
We’re doing well if we can learn from these things without losing our shirts.