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9th April 2020

Q&A from Ascot LloydWe’re very much listening to what you, our clients are saying and tuning in to what’s on your minds at this concerning time.

It may reassure you that there are some common threads and we are therefore sharing some frequently asked questions and answers that will hopefully help you.

If you have any questions, please contact your Financial Adviser.

Frequently asked questions

Should I get out of the market/sell?

No – our investment philosophy is to hold diversified portfolios, spread across many asset classes, sectors and geographies. The fact that the virus has spread indiscriminately means that the market turbulence is symptomatic of fear, and not a real reflection of stock value. Selling now will ensure you lock in those losses and you will miss out on the recovery. Whether that is in a week, a month or longer, remains to be seen.

Can my portfolio go to zero?

In short, no. one thing everyone has in common is that your portfolios are all diversified. For values to reach zero, or close to it, it would mean all asset classes across the world simultaneously became worthless – effectively the end of global capitalism.

What should I do?

If you currently take an income from your portfolio, and you have cash reserves outside of this, you may wish to talk to your Financial Adviser to reduce or suspend the income withdrawals. This is exactly the kind of situation that cash reserves are useful for.

Should I invest more now?

For some people who have cash reserves and were considering investing, now might be an opportune time to take advantage of market falls. We are certainly not able to predict when we will be the bottom of the market, as the future is unknown. When and how much you invest would depend largely on your attitude to risk and how you feel about volatility, which is certainly with us for some time yet. If you are relaxed about this and willing to take a medium-long term view to investing, then it could be worthwhile investing now when markets are depressed.

Should I change my attitude to risk?

Only you can decide what level of risk is going to allow you to sleep at night but do remember that if you lower your risk profile at this time, you will be reducing your equity exposure. As markets recover therefore, your portfolio will have less chance of recovering the ground it has lost.

Suspension of funds

Some property funds have suspended dealings at the moment as it’s impossible in the current market to put an accurate valuation on their underlying assets. This means that it’s not possible to buy or sell shares in these funds. We are sure that this will be a temporary measure and for those of you in Avellemy portfolios, your exposure to this particular asset class is minimal. Avellemy still feel it is an important asset class which should remain part of a diversified portfolio.

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We are open for business as usual, our Financial Advisers are available on the phone so please contact us if you have any questions.

Important Information

Past performance is not a guide to future performance and may not be repeated. Investment involves risk. The value of investments and the income from them may go down as well as up and investors may not get back any of the amount originally invested. Because of this, an investor is not certain to make a profit on an investment and may lose money. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is for information purposes only. Nothing in this communication constitutes financial, professional or investment advice or a personal recommendation. This communication should not be construed as a solicitation or an offer to buy or sell any securities or related financial instruments in any jurisdiction. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in the document. Any opinions expressed in this document are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or companies within the same group as Ascot Lloyd as a result of using different assumptions and criteria.