The COVID-19 epidemic has impacted, in some way, on the majority of individuals and businesses across the globe. In the UK there have been warnings of an impending severe recession, “the likes of which we haven’t seen” before.
Investors, too, have seen global markets change completely. The 11-year bull market experienced by the US came to an end in mid-March as a result of COVID-19 uncertainty. The Dow Jones, S&P and Nasdaq continue to fall – most recently as a result of coronavirus vaccine concerns. And in the UK and Europe, markets remain incredibly volatile.
How are individual sectors performing?
Individual sectors are experiencing very different levels of success. Hargreaves Lansdown marks out pharmaceuticals & biotech, food & drug retailers and tobacco as the three best performing FTSE 350 sectors this year. This Is Money highlights tech-focused stock funds – including Netflix and Amazon – as a sector that has “performed better than most other industries”. And the Association of Investment Companies has revealed that, of the ten best-performing sectors since January 31st, seven invest in alternative assets.
Conversely, AJ Bell states that funds exposed to oil have been amongst the hardest hit, along with commercial property funds. And with dividend cuts and referrals now totalling over £30bn since the start of the pandemic, some investors are finding that they have been hit hard.
Looking to the future
While the full effect of COVID-19 remains uncertain, investors must remain alert. Forbes recommends “adopting strategies that benefit from volatility”, consulting with a trusted financial partner to ensure that decisions are not based on panic. “The key”, they say, “is employing a strategy that allows you to make money in volatile markets regardless of which direction they turn”. It may be hard to predict the long-term economic impact of COVID-19, but now more than ever, it is vital to remain patient and make rational, considered decisions.
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