Brian D. Alexander is a Wealth Manager advising and assisting clients in the [Briitish] Virgin Vslands. Photo: Provided

In the face of this unemployment is heading up as companies that are not carrying a decent balance sheet are letting employers go or are forced to send workers home due to the lockdown rules of the countries. 

While this is happening the consumer confidence index is busy falling at a rapid rate due to the lockdowns as nations are brought to a standstill. This will continue to affect the markets for the lack of spending due to not being able to or otherwise not having the normal disposable income.

The epidemic, when going to writing has affected over 800,000 people and leaving over 39,000 deaths as per worldometer.com.

Some good news though is the interest rate cuts as well as the coronavirus bill passed which has assisted to pull back the bear market  by about 10% of recovery in just a 4 day period. But stocks, blockchain, bonds, currencies and gold remain incredibly volatile and unpredictable.

But is the bear market over??

To answer the question best I would suppose I would have to ask the question:
Has the coronavirus been stopped in its tracks??

Sorry readers since laying out the facts earlier its now 830000 affected and 41000 deaths. It has taken about 3 months to record 4000 deaths and just the last 3 weeks to record 37000 deaths.

On average markets declined today between 1% to 2% at time of writing.

My response with current investments

Well the hope and trust is that you chose your risk profile correctly on the outset of your investment. As most would agree to change in the middle of a bear market is relatively irresponsible. As economists, wealth managers and portfolio managers would advise, buy low and sell high.

In other words if you sold your current investments now, in most instances you would be making a loss. That would include trying to change your portfolio because to do so you would have to sell. Still there has been some comments in the market like “sell stocks and buy bonds and gold” etc. The problem with this thinking is to not stick with your long term original strategy, take losses and move into an investment that is not going to give you the growth out of the bear market that you have already paid a price for.

So the question is what should I do??

Well you have cushioned most (maybe not all) of the losses so wait patiently for your gains. In other word’s hold tight. If you have individual stocks on the share market, I will; however, scrutinise their balance sheet as cash in hand is what will keep the companies afloat at this trying time.

So in short if you are invested already my advice would be to hold in most cases and see out your original strategy. As well maybe in the future to take advice or different advice if you are not happy with your portfolio and are wanting to change or sell.

Okay so How Should I Time the Market??

Well as I was stating earlier is the bear market over and has it reached the bottom??

Honestly, if you asked most qualified financial analysts etc. the reply would be about 80% saying no or not sure. The other 20% would venture to say it hit the bottom last week.

Well let’s look at the facts and that is firstly that a Trillion dollars was pumped into the market that stopped the downturn but what it did not do is slow the coronavirus down which is spiraling out of control and causing lockdown, shutdown and job losses. With Americas unemployment on a figure of just under 4% it is said by different sources that by the end of the 2^nd quarter it would stand on 12,8% and others ranging up to 30%.

With such huge discrepancies in figures that affect our economy as well as the stock market how in the world can you time the market and call the bottom.

Like we all know most people have called the bottom to late because they waited around just seeing if the pullback was just that and so give it a little more time and therefore always miss the bottom.

What opportunities are there in the market and how do we take them??

So yes there is a lot of bad news as seen above but in the middle of that there is GOOD NEWS.

Whenever the market is in a recession/bear market many people have made their fortunes if they had available cash or even had that spare disposable income.

Yes it is definitely time to buy as most investments are exceptionally undervalued. The warning though as I said earlier is to be careful of a flimsy balance sheet and to spread your risks across a decent diversification while still sticking to your risk profile as I believe this should not be changed unless you are nearing or entering pension stage.

So if you are adventurous then you could take the chance and invest a lump sum immediately so that you could take advantage of the bottom. But is it the bottom as I have said and so you might just overpay relative to the bottom?

So, my thought would be is to phase that lump sum in over the next 3 to 6 months and in this way does not take as much risk as buying all at once. In other word’s utilising the volatility of the market and keeping in mind as we speak as I was saying the investments are already undervalued so already a good buy.

As well the other option is to just simply divide your capital up over the next 2 to 5 years and use dollar cost averaging on a monthly contribution. Please remember as many people have been asking me “should I start now if its not at the bottom yet?” or even “should I contributing now until it hits the bottom?”.

As I was saying, you do not know where the bottom is and therefore will miss the opportunity for buying at an inexpensive time and if it gets cheaper well all the better.

I believe this undervalued prices will be around for the next 2 years as so the good news is take advantage NOW.

Brian D. Alexander is a Wealth Manager advising and assisting clients in the [British] Virgin Vslands.