WE CONTINUE TO MANAGE THE FINANCIAL IMPLICATIONS OF THE COVID-19 PANDEMIC AS THEY UNFOLD

Much has happened since we first shared our thoughts around the COVID-19 pandemic on 8 March 2020. As a business we have aligned to the restrictions imposedby President Cyril Ramaphosa on 15 March 2020. With many of us now dealing with the reality of the virus’s arrival locally and further spikes in market volatility, we believed it is important to share some additional insights.

The economy will undoubtedly be impacted over the next few months
The pandemic is disrupting both supply and demand aspects of the economy. The impacts are now also becoming more visible as large events are being cancelled and travel restrictions are being imposed (as has already happened in many parts of the world). The outbreak lowers demand and disrupts supply, meaning countries cannot produce or consume as planned. This disruption may cause the global economy to enter a recession if governments fail to contain the spread.

On the other hand, an article in the Harvard Business Review points out that recessions driven by supply and demand shocks in the real economy (like this one), tend to not last as long or be as severe as those caused by financial crises and policy recessions. We remind clients that financial markets, however, respond immediately to any new information, often leading to large fluctuations. We therefore caution clients to expect ongoing market and currency volatility. Any shifts to your portfolio at this time should be approached with extreme caution. While our expectation is that the situation should stabilise in the near term, it is not yet possible to say when exactly this will happen. Our recent special report also puts the impact of the pandemic on markets in perspective.

Strong measures can help bring the outbreak under control
Strong measures have been imposed in countries like China and South Korea, and in response new infections have begun to decline in those areas. This has led to temporary hospitals that were set-up in response to the COVID-19 outbreak, now being closed in China. Restrictions imposed by the South African government should therefore be viewed positively as pro-active measures aimed at slowing the spread of the outbreak.

We are committed to bringing you continued service excellence
Measures have been taken to protect all PSG employees and, by extension, to ensure business continues as normal for our clients. In addition to taking recommended precautions like putting additional hygiene measures in place and limiting physical meetings, we have also taken steps to ensure we can maintain our high standards of service to you during the outbreak.

We remind you of the importance of relying on trusted sources
Fake news is spreading rapidly as a result of the outbreak. We encourage all clients to verify the sources they rely on when making any decisions and to speak to their financial adviser before making any changes to their investments.

We encourage you to follow the guidelines issued by government
We firmly believe the pandemic can be brought under control if everyone works together. We therefore encourage all our clients to put preventative measures in place, and to do their bit to help limit the spread of the virus. Please rest assured knowing that we remain vigilant as ever, continuously looking after the financial interests of our clients.

Source: PSG Wealth

Issued by Richus Nel on Behalf of PSG Wealth