COVID-19 has everyone thinking about their health and the safety of the people around them. Unfortunately, that’s not the only stress in people’s lives. The disruptive effects of the virus have Australians thinking about the economy, and the apparent fragility of their investment portfolios.
How fragile their portfolios are, depends, in a large part, on how they’ve been constructed. If the construction included more speculative direct equities, those companies are probably going to struggle to survive the economic fallout of the coronavirus pandemic. When the market has a major correction, the sexy story counts for nothing. It’s the fundamentals that matter.
The good news is, when a portfolio has been constructed from, for example, large cap ASX 100 companies with strong balance sheets, the future looks much more promising.
The other thing people are thinking about is the potential opportunity a market correction of this magnitude represents. While many investors are wondering when the right time might be to make a move, they probably should also be thinking about the agility of their advisers to implement portfolio changes.
At Elston Asset Management we proactively manage our portfolios via a SMA structure, which means we can move quickly and efficiently. This agility is backed up by clear, calm communication for advisers and our end investors. Even as our team switches to working externally, we’re keeping the conversation going and reaching out to advisers on a regular basis to give them all the information they need to keep their clients in the loop.