At the outset, let me make the observation that neither you nor I will be talking about coronavirus in five years’ time, let alone 10, 15 or 20-years’ time. That should provide the kind of perspective you require to navigate this period of market volatility successfully.

Coronavirus continues to rattle investment markets as the number of new cases outside China continues to rise posing increasing uncertainty over the impact on economic activity. And its impact has intensified following the plunge in oil prices. From their highs global shares and Australian shares have had a fall of around 20%.

The rapid fall in share markets has been quite scary. In our view the key things for to bear in mind are:

• periodic sharp falls in share markets are healthy and normal. With long-term trends ultimately remaining up & providing higher returns than other more stable assets like cash and term deposits. See Will Douglas’s video below for the history of Volatility
• Selling shares or switching to a more conservative investment strategy after a major fall just locks in a loss
• When shares fall, they are cheaper and offer higher long-term return prospects. We’ll look for opportunities the pullback provides. It’s impossible to time the bottom but one way to do it is to average you in over time.
• While investments have fallen, dividends from our share market haven’t. Companies like to smooth their dividends over time – dividends never go up as much as a company’s earnings in the good times and so rarely fall as much in the bad times.
• The best way to stick to an appropriate long-term investment strategy, let alone see the opportunities that are thrown up in rough times, is to turn down the noise.

For now, please do your best to look past the headlines knowing full well that our team are here to support you, and ensure you make the right (financial) decisions in a particularly volatile and nervous period.