Coronavirus Update

Current Investment Climate

Stock markets around the world have been extremely volatile the past few weeks, with the outbreak of coronavirus. These are uncharted times and it is therefore very difficult to predict when the world can start to return to some form of normality. At Lomond Wealth, we all share your concerns and fears around your pensions, investments, health and jobs. Governments and Central Banks including The Bank of England have introduced measures to reduce the financial impact as this virus spreads. Whilst we cannot give any guarantees around stock markets there are a number of key principal dos and don’ts at times like this:

Remain Invested

When markets are volatile it is often tempting to exit the market or switch to cash in an attempt to reduce further expected losses. However, it is impossible to time these movements correctly as nobody has a crystal ball to predict future market movements. Being out of the market even for just a few days can have a devastating result. For example, based on an initial investment of £10000, being out of the market for the best 10 days of a 20-year period would reduce your return from £32535 to £20152*. Those best days usually follow immediately after periods of turmoil, during which markets have often overreacted to fear and uncertainty, just like now.

Long Term Investing

Investments never follow a straight line return on a graph. There are often periods of exceptional returns, and similarly periods of disappointing returns. Being a long-term investor requires you to be extremely patient and accept that these fluctuations will occur. The global economy will recover as it did with the financial crisis of 2008, the dot com bubble bursting in 1999, and the terrorist attacks on the twin towers in 2001. There have been many similar crises that we have seen through and overcome. The long-term investor remains patient in the bad times and will be rewarded when things turn around.


A diversified portfolio with different asset classes offers some protection in the most difficult of times. By ‘not having all your eggs in the one basket’ you have some assets that protect your portfolio such as government gilts, fixed income, commercial property, and cash. Whilst these assets do not seem as attractive in rising markets, it is exactly at times like now that you need diversifiers in your portfolio.


We recently recommended a rebalance of the portfolio back in-line with the original asset allocation. A portfolio with 50% equities 50% defensive, may currently be 35% equities 65% defensive. By rebalancing the portfolio, you will move back in-line with the original portfolio, realign with your attitude to risk, and capture more of the potential upside when markets recover. Similarly, we rebalanced at the end of 2019 when equities were a greater percentage of the portfolio. There are no guarantees that this is the bottom of the market however governments across the globe have committed vast financial resources to help their respective economies.

Cash and Inflation

Historic low interest rates mean that any money held in cash is falling in value due to inflation. Whilst cash may feel like a safe haven at present the effect of inflation over a long period erodes the true value of your money.

Stick to the plan

Over the past few years we have invested a lot of resource in technology. One particularly valuable piece is our financial modelling software. By using this sophisticated software, we can help plan a recovery over the long-term and ensure that your investment goals are met. Whilst it is very daunting to see the value of your investments fall, it’s another thing to see this modelled out over a long-term period. For pension investors the sustainability of income is one such concern that you may have. By using the software, we can effectively model different scenarios to give you peace of mind when you need it most. By effecting a long-term plan, it helps you stay focussed on your goals without being distracted by short-term stock market changes.

Speak to Us

At Lomond Wealth we are watching unfolding events concerning Coronavirus closely and following the advice of health authorities. Our primary aim is to ensure the health of our staff and clients and to ensure that you are given the very best service we can during these unprecedented times. We are here to help and appreciate you are concerned and have many questions. We are happy to talk over the phone, on video conferencing via skype/zoom, or by email. The last 10 days have been very challenging to get all our staff working from home as the situation escalated rapidly. All email is up and working, we are currently setting up our phone systems at home so you should be able to call us as normal, and we have the facility to conference call also. Our thoughts are with all of you, and everyone else being affected by the spread of this virus.

Derek Fish

Managing Director

Lomond Wealth

Source quilter investors, Global equities study 31/12/1999 – 31/12/2019