After dramatic falls, are opportunities starting to emerge?

Share

As Covid-19 continues to spread uncertainty and prompt market falls, experts at Schroders have highlighted the possibility that current valuations could become more attractive for investors.

On the surface, market falls appear to be very dramatic. Since its peak on 19 February 2020 compared to close of business on 12 March, the US S&P500 index has fallen 26.6%. However, when put into context, it is important to recognise that shares began the coronavirus outbreak at very expensive levels, which made them susceptible in any case to changes in investor sentiment.

At present, shares are priced in expectation of a technical recession (when the economy shrinks for consecutive quarters). Following the surge in government intervention on public and business activity, it is thought the potential for a longer recession is becoming increasingly likely, although the real outcome remains to be seen.

From an investment perspective, the team at Schroders expect valuations to fluctuate for the near future, influenced by investors weighing up the prospect of further lockdowns and continued market decline versus the impact of any government and central bank intervention which could cause short term bounces.

Considering the risks and uncertainty, caution is still advised and seeking advice from a professional adviser encouraged before taking any action on portfolios. But, whilst markets remain volatile, opportunities are beginning to emerge.

Articles on this website are offered only for general information and educational purposes. They are not offered as, and do not constitute, financial advice. You should not act or rely on any information contained in this website without first seeking advice from a professional.

Past performance is not a guide to future performance and may not be repeated. Capital is at risk; investments and the income from them can fall as well as rise and investors may not get back the amounts originally invested.

You are now departing from the regulatory site of Finura. Finura is not responsible for the accuracy of the information contained within the linked site.

Sources:
https://www.schroders.com/en/uk/private-investor/insights/markets/johanna-kyrklund-are-opportunities-beginning-to-emerge/

Share

Other News

Six Ways To Use Your Money For Good

There are multiple ways to make a positive social impact with your money. Here are six of the most common that you may wish to consider, that your Finura financial planner can help you to implement.

Stamp Duty Land Tax – Higher Rates For Additional Dwellings

Stamp Duty Land Tax (SDLT) rates for additional residential properties have been increased from three percentage points above the standard residential rates of SDLT to five percentage points above the standard residential rates of SDLT for any transactions which take place on or after 31 October 2024.

Below is a summary of the rates which applied from 23 September 2022 – 30 October 2024 to additional properties versus the new rates with effect from 31 October 2024.

Lifestyle Modelling: The Crystal Ball for Your Financial Future

Have you ever found yourself asking “When can I afford to retire?”, “Can I afford to leave a legacy for my loved ones?”, “How much do I need to be saving for retirement?”. If you have, lifestyle modelling will likely be beneficial for you.