Market Update - March 2020
The dramatic moves have continued and are causing concern. We did have a more detailed update drafted, but the speed of the changes warrants some briefer comments now. We have deliberately waited until our share market opens before completing this.
While this is concerning and we're not dismissing the significance of the circumstances, it is important to take a broader view to make sense of what is happening. This means trying not to get caught up in hourly or daily moves and news cycle.
Some context is needed.
You will hear about the level of the falls in the US overnight. What will be conveniently left out of the headlines is that this move has reversed the gains from Friday both here and overseas. On Friday there were gains of similar level to these losses. To be clear, this is not dismissing the movements. The size and speed of these are unsettling. But the falls cannot be looked at in isolation.
What is unusual at the moment anyway is that Australia is leading the US in market movements. Normally we follow. The reason we wanted to wait until the markets open is to see how we respond. Currently, the Australian Sharemarket is up.
There is a lot of incorrect information about what the falls mean in terms of erasing past gains. The fact is the US markets are back to around January 2019 levels, so a little over a year ago.
There will be more economic and financial support coming from Governments here and overseas.
News on the vaccine is that testing has commenced.
Our portfolios are holding up well. The level of falls on both are significantly below the share market movements. We will have more detail on this in the coming days. The only changes we have felt appropriate so far are to invest further in some of our underlying managers in the Clearwater Dynamic Portfolio. Again, this is a unique opportunity because it is a new fund and has money available.
We will continue to provide further information in the coming days. As always, contact your Financial Advisor if you wish to discuss this in more detail.