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As I See It: Market Volatility Update


Just a brief update on the current volatility and some practical issues in the context of the strict travel rules introduced by the Australian Government.

In looking at the rapidly increasing Coronavirus figures, which most of us cannot and must not ignore, it is worth noting that Influenza generally effects 300,000 Australians a year and claims 800 deaths.  Currently, in Australia we have 401 total cases of Coronavirus and 5 deaths.  Although the total number of current cases is much lower, we must be respectful of the cautionary restrictions imposed that are there for our protection.

Global Regulators, including our own Reserve Bank have intervened on the stock market  to seek to provide some price stability in both the equity and credit markets.

This has included reducing interest rates close to zero and commencing a swap of cash from the RBA for less liquid fixed interest securities held by our banks.  The intent being, to seek to support the economy at a time when many people are unable to work to their full potential due to quarantine restrictions.

Rather like the virus itself, the best approach is to allow events to work through the financial system rather than trying to time both selling and then re buying back into a very volatile market.

The key being to have enough cash and liquidity to ride out the current market while trying  not to spend too much emotional capital watching market commentary.

For those clients with access to cash as some stage there should be some excellent buying opportunities.

We will look to stagger (‘Dollar cost average’) cash  investments back into the market in a careful fashion on a client by client bases.

For the foreseeable future we will conduct all client meetings over the phone/Skype to help protect everyone’s health.

We are currently contacting V&P clients for a brief personal phone conversation to ensure you are comfortable with the current strategies in your portfolio.

We are effectively working around the clock so feel free to ring me directly as and when you need to.

We are here to serve you and our community.


Posted by Dr Tony Virtue, Principal


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