These are certainly interesting times. And I dare say anxious times.
The Coronavirus situation is ever changing, and we don’t know how it is going to play out. But this is not the first time, nor will it be the last time, our markets are faced with adversity. The old Member’s Pavilion at the Sydney Cricket Ground has been through wars, depressions, booms, busts and on Friday night, an enforced empty stadium. All things come and go yet, much like the old grandstand, we continue to remain.
[Chart credit: Vanguard]
Through all one thing holds true. We as a race, and if the recent bushfires taught us anything, as Australians, are resilient. We get up, go to work, pay our bills, provide for our families, engage with our communities, celebrate birthdays, feel the sand beneath our toes, see the flowers in spring and the leaves fall in autumn. We simply continue to live our lives. And living, just like the continual progress made through innovation and technology, as well as the productivity, ambition and determination of other humans, is what drives us forward.
Are we headed for recession?
Is the world headed for a recession? Maybe, we don’t know. But whatever transpires, we’re prepared. For our retirees living off dividends, you can afford the ups and current downs in the market. For retirees drawing down on capital, through our pension bucket approach, your portfolio has sufficient buffer to provide for your short to medium term capital needs, reducing the risk of accessing funds during times like these. And for our accumulators contributing and reinvesting dividends, the ups and downs of share prices provides both a healthy value in good times and an opportunity to buy lower in lean times.
So let’s look at the things we can control.
Your portfolio’s resilient long-term set up is one. Risk management is another. Coronavirus is a high risk. However, it’s also a low probability risk. But being a potentially huge risk, it must be addressed. Fortunately, we can all do our little bit to help mitigate this risk. At Forrest Private Wealth we’re asking all staff to avoid public gatherings, car pool over public transport commute, wash their hands regularly and if they wish, work from home over the coming weeks. And we’re encouraging video meetings over physical meeting. Of course, if you genuinely need or want to come into our office, we are available. We are simply reducing our team’s need to be in any unnecessary contact through this period.
If you think we are being over cautious, let us know
We are by no means intending to feed the fear machine. We love what we do and are ever thankful to you, our client, for continuing to allow us to pursue our passion. Your health and safety, along with our team’s, is always front of mind with everything we do. Let’s all look out and check in with each other in these interesting times.
Peter Stevens
Director & Financial Planner