I hope this weekly blog post finds you well and not suffering withdrawal symptoms after eating your own bodyweight in chocolate over the Easter weekend...
Having been running the business from home for the past five weeks and remaining largely housebound, the Easter bank holiday didn’t feel quite the same as usual, though that’s not to say the long weekend wasn’t enjoyable and restful.
It looks like many of us will continue to be housebound for the foreseeable and that for many, homeworking won’t be ending any time soon. It was announced yesterday that the UK is to face at least another 3 weeks of lockdown, with further restrictions likely to follow. Whatever your circumstances, we hope you are coping well in these strange times and for those of you piloting your own company through this difficult period, that the government support measures are helping your business weather the storm.
Economy and Financial Markets Update
As we conclude week four of the UK lockdown and face a further three weeks of the same, economic doomsday stories abound with some commentators drawing comparisons with the global depression of the 1930s. It is undoubtedly an extremely tough time for businesses large and small, even taking the government’s unprecedented support measures into account. Yet, despite an initial wave of panic selling and sharp declines in global stock markets, many world equity indices have recovered between a third and half of their March losses. This begs the question whether the 2020 COVID-19 stock market crash is over and a sustained recovery may be in sight.
My expectation is that we will continue to see pockets of relative calm in financial markets punctuated by short bouts of extreme volatility. Hard data emerging about the economic impact and potential path to recovery will likely be the key driver. There is certainly potential for things to get worse before they get better, as productivity and unemployment figures for Q1 are released, confirming the extent of harm dealt to the various global economies by their Coronavirus response measures. China have already announced theirs. Official figures suggest that their GDP shrank by 6.8% for the first three months of the year - its first year-on-year contraction in decades and in fact since records started. More will become clear as the extent of the lockdown in western economies becomes known and they begin to release their own GDP figures later this month.
However stark the numbers may be and in the event that they do weigh upon markets in the short term, it is precisely this sort of data that is needed to support a more sustained stock market recovery. As the saying goes, sometimes you have to hit rock bottom before you can rise again. Only by understanding and facing up to the extent of the damage done by the Coronavirus crisis, can we begin to establish when we are through the worst of it and on the road to recovery.
It is likely we will be in for a bumpy ride for some time yet and the crisis will still have plenty of twists and turns before we see the green shoots of a sustained recovery begin to emerge. Regardless of what happens in the short term however, we remain long term investors with the benefit of diversified portfolios that are professionally managed. Like all market downturns before it, the current pain in financial markets will be temporary and things will get back to normal with time. In the interim we must remain patient and can rest assured that portfolios remain well-positioned and under close observation.
Keeping Safe from the Scammers
Unfortunately, in the modern world, scams and fraudulent activity remain a very real threat. It’s why we have such high level security protecting our client data and business operations. Sadly, it has been reported that such despicable behaviour is surging at present, as fraudsters try to take advantage of the Coronavirus crisis by targeting individuals and businesses. Shockingly, on Friday 20 March, City of London Police reported a 400% increase in scams as a result of Coronavirus-related fraud. It makes me sad to have to write about such things, as I hate the idea adding to people’s worries at this time. However, it is more important than ever that we remain vigilant and safe.
Whilst scams work in a variety of ways, their eventual aim is usually the same; to obtain your personal information and bank account details. They may take the form of incoming phone calls from people posing as your bank, utility company or HMRC, asking for sensitive information. If you receive an incoming call where the caller is asking for personal information, it is advisable that you do not release any information. Instead if it sounds genuine, you can look up the contact number of the organisation using an old statement or letter that you have on file - or via their official website – and call them directly to check if you actually need to take any action.
Bogus emails are also a potential threat. If you ever receive an unexpected email that contains an odd looking link or a request for sensitive information it is strongly advised not to interact with it, as it may contain a virus or malware. Alternatively, it may seek to direct you to a website that appears genuine (such as your bank or utility company for example) asking for you to verify or update your payment details. An increasingly common scam is for businesses to receive fake emails purporting to be HMRC in relation to the new grants and schemes being offered. HMRC, your bank or utility companies will never email you asking for sensitive information like this and as with spurious calls, if in doubt, call the organisation directly on a phone number you can verify to check if you need to take any action.
Finally, whilst there are lots of excellent local community support groups helping the more vulnerable or less-able, there are also cases of fraudulent door-to-door callers offering fake shopping services or false inspections of home electrical or heating systems. If anyone calls who you do not know, do not give them personal information or let them into your property.
Consumer group 'Which' have some excellent information about scams on their website, including a short video that highlights things to look out for.
Captain Tom Moore's 100th Birthday Walk for the NHS
I’m pleased to finish on a positive note this week with the story of Captain Tom Moore, a retired WW2 veteran who pledged to walk 100 laps of his back garden in aid of NHS charities. He initially pledged to reach his goal by April 30th, hoping to raise £1,000 for the NHS using his Just Giving page, but things escalated quickly as his story went viral, resulting in a landslide of public support and media attention.
At the time of writing Captain Tom has raised nearly £19m in generous donations from the British public. He completed his efforts this morning two weeks ahead of target, flanked by a guard of honour from the 1st Battalion, the Yorkshire Regiment, having raised more than 12,000 times his original goal. An incredible achievement and another great symbol of the British people coming together in the face of adversity. Captain Tom; we salute you!
I think that about covers it for this week. Whilst previously our bulletins have been released monthly, I moved to a weekly format in March to keep everyone informed given the impact of Coronavirus on the economy and financial markets. I don’t want to overload you with content and have pledged to return to monthly bulletins if we see a decline in interest. However, our stats show that a steady three quarters of you are reading these each week, which tells me that either some of the content remains of interest, or you’re all sitting around in lockdown bored with time on your hands! Either way I’ll be continuing to put fingers to keyboard on a weekly basis for now as a way to keep you informed as things unfold…
There is still no substitute for direct contact however and we are continuing to conduct virtual client review meetings using Zoom. If your review is not due for some time and you would like to discuss anything directly in the meantime, please feel free to get in touch and we can set up a call or virtual meeting.
