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Sticking to what you know

21 May 2020

Categories: EQi market commentary

EQi investors are confident about the future

Despite the last month or so being one of the most tumultuous in history for the stock markets, EQi investors are actually feeling fairly confident.

And that’s important because investing needs a longer-term strategy. So while the news might often seem to be full of doom and gloom, there is also sense of optimism that when we finally get a handle on managing the impact of Covid-19, and therefore the economy and the businesses that underpin it, will recover, albeit slowly.

We asked 285 EQi investors how they felt about the current financial situation, as well as how they were managing their portfolios and any changes they had made:

  • 37% of you said that you remain confident about the performance of your investments over the next six months
  • Confidence increased to 66% over an 18-month period
  • 61% of you said that the pandemic has not impacted your appetite to risk
  • 30% of you have left your investments alone, whilst 28% continued to buy and sell; just 2% have been making sells alone
  • The UK and US remain the favoured regions, with 35% looking at investing in the UK and 19% in the US

This confidence is being reflected across the board, and does not appear to be limited to experienced investors, with Which reporting a surge in the number of new accounts opening across UK investment platforms in April.

And though some have been taking advantage of bargain stocks, a look at industry data globally shows that, on the whole, investors aren’t making any rash changes when it comes to where in the world they are investing.

It will be a while before we know the true extent of economic impact on the UK, but the Bank of England provided some indication in its May report, predicting the worst UK recession since 1706.

The government announcing its first steps for easing the lockdown provided a sure sign of hope for the future however, with potential for some shops reopening in June if the number of cases continues to slow.

Though this will give the economy a much-needed boost, with experts predicting further pockets of infection in the coming months, it is still worth preparing for more ups and downs ahead.

We all know investing is a long-term game but, as we move through this stage of the crisis, keeping this focus will be more important than ever. History favours those who avoid sudden moves in times like these - the best approach is to stay calm and hold out for that eventual recovery.

Despite the difficult short-term outlook, people know from experience that we will see the other side of this crisis, just like any other, and that their investments will balance out once again in time.

Author: EQi Categories: EQi market commentary