Coronavirus and the Impact of fiscal and monetary policy

In the second of our weekly blogs surrounding Coronavirus (Covid-19), we take a closer look at markets. It is still too soon to forecast how markets may perform over the coming months and years, but being able to contextualise can be helpful. We will also be suggesting other useful sites/blogs for user-friendly insights, as well as Q&As.

For the benefit of those new to our blog, The Wealth Consultant is in the business of helping clients achieve financial peace of mind, a tall order in the current environment. However, it is at unprecedented times like these, not seen since the 2008 Global Financial crisis, and as some may argue not seen since WW2, that we must keep our head, or risk losing our mind, we must “Keep Calm and Carry On”. In the meantime, read further to learn more about:

• Monetary and Fiscal Policies updates during the pandemic
• COVID-19 consequences for the stock market
• Investment market updates

Monetary and Fiscal Policies updates during the pandemic

Since our last Blog, as the number of recorded infections and deaths tragically rises worldwide, we have witnessed markets regain some ground, on the back of coordinated monetary and fiscal measures. Of note, in the UK Chancellor Rishi Sunak has pledged £330bn, whilst in the US Donald Trump agreed a $2tn (£1.7tn) coronavirus aid bill, the largest economic stimulus in US history. Whilst details of both are emerging daily, only time will tell if these will be enough, sadly for many, they will not.

Such measures were highlighted as critical to avoid lasting economic damage, by BlackRock (amongst others), in our blog last week. Given the magnitude of the pandemic, it is hard to believe that anyone is better placed than BlackRock to offer informed updates on the fast-moving and precarious situation we all find ourselves in, as such it would be remiss to overlook their regular updates. Read here.

COVID-19 consequences for the stock market

The Visual Capitalist presents an interesting report on Black Swan events, rare, unexpected events, that can have severe consequences in the stock market. In their report they compare the Covid-19 reaction with other historical events, charting their downturn and length of recovery. Importantly, they highlight the need for investors to remain disciplined through the volatility, and we would 100% concur with that. History has shown that markets will eventually recover, and may reward patient investors. Read here.

Investment market updates

When looking for real insights, explained in simple, jargon-free language, one of my long term favorites is Holly Mackay’s Boring Money. In the wake of Covid-19, Holly has launched a new blog, Stock Market Meltdown, to provide straight-talking answers to difficult questions about your wealth and investments. It is well worth exploring, for all matters money related (not just Coronavirus updates). Read here.

Another great site that is well worth visiting for a broad range of money-related topics, although I am sure it requires no introduction, just in case, Martin Lewis’s Money Saving Expert.

Please do get in touch with your questions, which we will seek to address in subsequent blogs, or let us know how we can help you make your finances thrive by filling up this questionnaire.

Keep well, Keep Calm and Carry On.

Written on Friday, March 27, 2020 on the subject of Blog