What we know:
The one thing that stock markets around the world hate most, is lack of information and uncertainty. Covid-19 more commonly known as the Coronavirus, ticks the uncertainty box and has had a significant impact of global markets around the world over the last few weeks.
It would be foolish for us to predict what will happen next, but what we can say with some level of confidence is there is more uncertainty to come. Which means that all markets will experience far more extremes of volatility (highs and lows) in the market than we have had for some time.
In these times of uncertainty, the instinctive reaction of investors is to take their money out, ensuring what they have left is then safe perhaps popping it into the bank. The problem is the market has already dropped significantly in a very short time. Looking at the close of play month to date (12th of March) the NZX 50 returned -8.24% and -10.08 year to date. However the past 12 months have still delivered a positive return of 9.96%.
What is Mint doing?
Pretty much what we have always done in this type of environment. We are actively looking for investment opportunities – fortunately, we have been carrying more cash than normal over the last month or so, and companies are now cheaper than they were a week or two ago. We are spending a lot of time evaluating our investment portfolios to ensure we have confidence in the investments that we have selected for their long-term value, as well as, maintaining an appropriate level of risk given the market environment.
There may still be more to play out regarding the virus and its impact on the global economy. The longer the uncertainty, the higher the risk is in the short term, however, as this virus plays out the markets will likely recover unless the fundamentals have changed.
In the meantime, we appreciate that this can be a stressful time for our clients as no one likes to see their investment go down in value. Please don’t hesitate in contacting the team at Mint on any aspect of your investment with us either by dropping us an email to firstname.lastname@example.org or calling us 0800 646833.
Chief Executive Officer
Mint Asset Management.
Disclaimer: Rebecca Thomas is the Chief Executive Officer at Mint Asset Management Limited. The above article is intended to provide information and does not purport to give investment advice.
Mint Asset Management is the issuer of the Mint Asset Management Funds. Download a copy of the Product Disclosure Statement
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