As we are all very aware, the impact of Coronavirus is being felt around the world. At Holden & Partners, we have been following its impact closely and we are now writing with our views on the situation. One area that is important to note is that we are long term investors and we generally don’t make hasty changes to portfolios. We try and look past the noise and use analysis to build portfolios with diversification, through allocating assets globally and across different classes. This helps spread the risk inherent in investing. As it stands, portfolios can include equity, property, infrastructure, government and corporate bonds as well as other diversifying asset classes.

Coronavirus or its more catchy name of COVID-19 has, at the time of writing, infected globally 80,000 people and caused the death of around 2,500. The outbreak started in China and has now spread to at least 29 countries (potentially now 31) with the majority of deaths still confined to China. More recently, we have seen a spike in coronavirus cases in Italy with the authorities locking down over 50,000 people in an attempt to limit the biggest non-Asian outbreak of the virus. Although this news and further news of quarantines can be alarming, it is important to understand that these hot spot outbreaks are likely to continue. It is how these outbreaks are contained and dealt with that is more pertinent than the headline-grabbing ‘Confirmed Outbreak’. At the time of writing, Switzerland has just announced its first confirmed case with Austria also confirming infections.

The World Health Organisation has warned of the risk of a pandemic; however, the current status of the outbreak remains that of a ‘Public Health Emergency of International Concern’. For a pandemic, there has to be geographical spread and harm. At present, there is a spread but no large-scale disease or death outside of China. This isn’t to say that it couldn’t reach the levels of a pandemic it is just not there yet and might not reach it.

In the last 2000 years, the world has endured innumerable pandemics. Including smallpox, typhus, cholera and major bubonic plague. In 2020, we have never been more scientifically advanced and now we arguably have better crisis plans in place than any previous time in history.

Moving away from the virus itself to look at how it might affect global markets and economies, it is evident that the outbreak has put a dampener on the positivity that has been seen across the board following a strong 2019. Investors have been seen moving to safe-haven assets such as gold and government bonds, sending the gold price to a seven-year high and the yield on government bonds – which moves inversely to bond prices – to new lows.

There is no hiding from the fact the virus will affect businesses with declines seen in airlines, luxury good producers and card processors particularly, shares since Monday morning, the extent to the damage in other sectors is still yet to be seen but we continue to monitor it closely. It isn’t just airlines in the western hemisphere that are suffering. In the month to 13th February the number of departures out of Chinese airports – some of the world’s busiest – have seen a drop of 87 per cent. This will, of course, have a knock-on effect, particularly when considering tourism. France has already seen declines of 30-40 per cent in the number of visitors to the country compared to this time last year. In addition, it is important to consider that no one spends like Chinese tourists. This group spent $265bn globally in 2017, a figure which will be knocked by the virus outbreak.

Tourism isn’t China’s only export; it is also a huge exporter of goods. Despite the ‘Made in China’ tag being a staple for Western consumers for decades it has grown significantly in the last ten years. As of 2017, Chinese exports accounted for 28 per cent of all “computer, electronic and optical products”, a figure that will not escape headwinds but for how long and how hard we are yet to know.

As long-term investors, it is important to block out the short-term turbulence events such as these might cause. As ever, we will stick to the principles of long term and diversified investing. Investing is about accepting that the investments will go up as well as down. Inevitably turbulent times such as these can provide opportunities as some asset classes fall in value. It is very important to note that when markets do recover, the bounce back is usually quick therefore it is important to stay invested and continue to receive dividends and interest in the meantime. We will of course continue to monitor the situation as it develops and will send further updates in due course.

My wife and I really value the advice and support we’ve received over many years. Our key contact is Tim Cosway, whose friendly and calm manner is a real plus. He also involves team members who are equally committed. We particularly value that their approach is that no question is stupid – we always receive a clear and helpful explanation. We have full confidence in the team’s management of our finances and definitely recommend them.

Howard

We have consulted Holden and Partners for 10 years.  Having been in financial disarray because of poor advice from our previous financial advisor, we have Tim Cosway to thank for digging us out of a deep financial hole.  As a result of his painstaking tenacity pursuing a claim against our former financial advisor through the Financial Ombudsman Service, which resulted in substantial compensation, we can anticipate a comfortable retirement.  We continue to take Tim’s advice on all financial matters.  He is a pleasure to deal with, and we whole heartedly recommend Holden and Partners, and Tim in particular.

Mike & Jacque

I have been a customer of Holden & Partners since its inception. During this time, no matter what the state of the financial climate, I have always found that their advice has been balanced and fair. They have a good understanding of everyone’s individual circumstances and produced tailored strategies to match these needs and expectations.

Duncan B, NHS consultant

I’ve always received high quality, personable advice at a time of my convenience. My adviser has often travelled to my home in order to provide very personal service. The advice given is clear and unambiguous. The risks of different types of investment have been clearly discussed to allow me to make an appropriate decision on the nature of my investment portfolio. This has been of great importance when considering the available investment options for my forthcoming retirement. I have always considered that Holden & Partners is very client centred and they have my best interests at heart. I have been with Holden & Partners since 1996 and have recommended them to friends and colleagues on many occasions.

Michael, Surgeon

Holden & Partners manage our company pension scheme with a totally professional and dedicated approach. They have worked with us over a number of years, and are able to explain the potential ‘minefield’ that is pensions, to make it perfectly accessible for the staff.

Jeremy, Print Management Partner

On retirement after 40 years of salaried employment, I interviewed several financial advisers, amongst whom Mark Dodd of Holden & Partners was the nicest and seemingly the most understanding of my investment needs and priorities. Since then my wife and I have had regular (c.6-monthly) meetings with him in order to check and, when necessary, adjust the holdings in our portfolio. This has been very helpful and provided a comforting sense of confidence and security. I have recommended Holden & Partners to others and will certainly continue to do so.

Patrick, retired university professor

It’s easy to feel powerless in the face of global trends such as climate change and environmental destruction. But I feel I regain power as a consumer and a citizen by thinking about where I spend my money and to whom I entrust my savings. I chose Holden and Partners because they were recommended to me and because of their strong track record in ethical investments. It has proven to be a wise choice. Their advisors listened carefully to my needs and created an investment strategy and portfolio that has met and indeed continues to exceed my expectations. The culture of a company also matters to me, I have found their advisors to be well informed and financially shrewd but also easy to speak to and engage with. Many of us find it difficult to trust institutions and organisations these days, but I do trust Holden and Partners to make the right decisions on my behalf.
I would have no hesitation in recommending them to others.

Patrick, Advertising and Marketing Consultant

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