After 13 weeks in lockdown, today we have very welcome news that the Government is scaling down the alert level from level 4 to level 3; the virus is now said to be “in general circulation” rather than previously “high or rising exponentially”. We could soon be feeling that our lives are a little less restrictive and we can look forward to seeing more of our friends and family. Our retail clients have been taking the opportunity to refurbish their premises with fresh paint and new floors in some cases and we are being encouraged to hit the High Street.
In the same week we have seen a potential further outbreak in China, once again in a food market, so there is still concern globally about a second wave of virus infection. That said, global markets which dipped last week have recovered ground and a steady upward trend since the dramatic falls of the week of 23 March have demonstrated a steady recovery since.
OPEC are continuing to make progress regarding cuts in the supply of oil – if you missed the article on negative oil prices, you can find it on our website in the News section – and we have seen consumer staples and technology sectors being the best performers overall. We have been saying throughout that the “buy and hold” philosophy is the one that will win out and we have had a number of conversations with clients who have been spooked by news stories and predictions but we have consistently advised clients that all the evidence points to the fact that in the end holding your nerve and sticking with the good quality investments that held in your portfolios will be the right course of action. It is far too easy to think that we can time the market, ducking out at a high and buying back in at a low, but in practice that does not happen. Generally speaking, what happens is that an investment market falls and there is a human tendency to panic and want to bail out when the market it at its lowest with the plan to buy back in again later. However, by the time the decision to re-enter the market is made, it’s already too late, the markets are climbing and those investors are marooned in cash, unable to make back the losses, thereby missing an important part of recovery. At Acumen, we recommend that our clients “stick with their knitting” and follow the market back up. Time and again this has been proved to be the safest and wisest course of action, and it is one that has seen investors through a number of these bear markets in the past.
Bear markets typically last a far shorter time than Bull markets so again, whilst we are working our way through the Covid-19 crisis and looking forward to the future, the investment markets are already looking ahead, pricing in expected stresses and they have taken into account the fact that the economy is going to be affected. Whilst some companies (Amazon being a good example) will come through bigger and better than ever, there will be some casualties (travel companies being a likely sector to suffer) and the investment managers we work with are making judgements day by day to reposition portfolios to be the best placed to deal with the future as it unfolds.
At a local level, as we move towards returning to our Burscough desks (Liz Warren and Jayne Clarke, our Pilling team are already back in their office) we are now told that the screens and protective equipment will be delivered and fitted on 6 July and so we are very pleased to say that sometime after that we will be starting to re‑open the office. We have protocols already agreed on which observe all the Government guidelines to protect staff and clients. Following the example of hospitals around the country, for the moment, our reception waiting area will remain closed and clients will be asked to call the office when they arrive in the car park. We will then call back as soon as we are able to welcome you in and you will go straight into a meeting room. With these sort of risk management protocols we feel confident that together with plenty of hand washing, hand gel and common sense, we will soon be able to offer our clients a face-to-face service, albeit along the length of our very large conference tables.
On this matter, we have three conference/meeting rooms in the building, however, we feel one of them is too small to allow for the proper social distancing so we will keep this room closed for the time being. As a result, we may have to stagger appointments rather more than we have had to in the past, but I am sure everyone will understand.
Further updates will follow! In the meantime, we remain confident that the investments that we have in place for our clients are standing up to the ravages of the stock market and are taking advantage of the upturn. All of our clients have a multi-asset approach and so some assets are there for defensive reasons and some are there to produce capital growth. The purpose of this approach is to build all-weather portfolios and this is certainly what we feel is appropriate.
We have been pleased to be able to provide a regular newsletter throughout this very difficult and unusual period and have received some really positive responses about them. Of late, we have deliberately reduced the frequency, not least because we did not want to be just producing newsletters just for the sake of it.
We are planning a phased return to the office shortly and we have great plans for the future. We are delighted to be able to announce the arrival of a new recruit due to start with us as soon as we are back in the office, so we will be looking forward to introducing you to Caitlin Jones who will be the new face on reception, taking over from Lucy Molina who has done such a sterling job.
In the meantime, if you have any queries at all please do not hesitate to contact us on the usual numbers or speak to your dedicated advisers. We will all look forward to being able to see you again in the near future.
Best wishes from Angela, Jon, and all the Acumen team.