Lessons from COVID

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Its interesting the things we’ve learnt since March 23rd. If you had asked me in February about staff working from home I would have said, no way Jose! That is simply not something we do. The advisers meet clients. That’s how we do business. How would they do that from home? The admin staff come into the office to process work, print letters, documents and valuations. They can’t do that from home. And yet over the last two months the advisers have been successfully working from home, meeting clients over the phone or zoom and some admin staff have been processing work from home. Our expensive telephone system has been doing things it could always do, but we never really understood how and we have had a small team of people in the office printing things. That’s an amazing transformation in a short space of time.

At the same time, we are seeing some time-honoured truths being proven once again. Apparently, markets do actually fall as well as rise and performance can’t be guaranteed. Between the 19th February and the 23rd March, the FTSE 100 fell by 2,463 points. That’s a drop of 33%. If you were in a FTSE 100 Tracker, you would have lost a third of your investment in just over four weeks. Except you wouldn’t have if you didn’t sell at that point. Between the 23rd March and the 8th June the FTSE 100 rose by 985 points. That’s an increase of 19.7%. Its not back to where it started, but that’s an impressive recovery so far.

So what are the lessons? Firstly, don’t panic. Selling at the moment simply locks in your loss. We don’t know what will happen next, but we expect to continue to see a strong stock market recovery over a short period of time. We can’t predict that, but staying invested increases your chances of being part of it.

Secondly, diversify. A well-balanced, diversified portfolio should have shielded you from the worst of the falls and it will serve you well in the recovery. Our portfolios have fallen along with everyone else’s, but nowhere near as much as the markets. That means the recovery started from a higher base, adding to your long term performance.

And finally, challenge your assumptions. If this has taught us anything it is to reassess what we thought was possible and come up with a different way of working.

Craig Davidson

Managing Director

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