The outbreak of Covid-19 dominated the news headlines and sparked concerns globally. As travel advisories are issued and face masks disappear from store shelves, the financial markets have also experienced significant effects. In this blog post, we will explore the impact of Covid-19 on financial markets and what New Zealanders can expect.
Global Financial Market Turmoil
The news of the Covid-19 outbreak has caused turmoil in financial markets worldwide. Investor confidence has plummeted, leading to a record plunge in the US stock market. Similarly, the New Zealand share market has felt the impact, experiencing a nearly five percent drop in a single week.
Economic Outlook and New Zealand’s Resilience
Amid concerns about the potential lowering of the Official Cash Rate (OCR), Finance Minister Grant Robertson assures that New Zealand’s Crown accounts are in a strong position to withstand any economic uncertainty arising from the coronavirus. With a surplus in the books and expenses in line with forecasts, New Zealand remains resilient in the face of these challenges.
Kiwisaver and Investment Considerations
New Zealanders may notice the effects of these events reflected in their KiwiSaver accounts, particularly for those invested in growth funds. While experts suggest that this economic dip is unlikely to have long-term consequences, individuals nearing retirement may want to review their portfolio. Capital preservation becomes crucial when considering shorter-term goals and investment decisions.
Importance of Diversification and Long-Term Financial Goals
Events like the Covid-19 outbreak emphasise the significance of a diversified investment portfolio for maximising long-term financial goals. A diversified approach helps spread risk and minimise the impact of market fluctuations, ensuring greater stability and potential growth over time.
Norfolk Mortgage Trust: Resilient Investments
Investors currently involved with Norfolk Mortgage Trust can find solace amidst the market volatility. As Norfolk does not invest in the share market, the fund remains unaffected by the recent global stock market downturn. The directors of Norfolk Mortgage Trust reassure investors:
“Norfolk is structured to be resilient to significant changes in the operating environment and this position is reinforced by the risk-averse approach directors take to the management of the business, including credit and other risk management policies.”
Summary
Covid-19’s impact on financial markets is undeniable, with significant turbulence experienced globally. New Zealanders should monitor their investments, review portfolios, and consider diversification to navigate these uncertain times. With its resilient investment approach, Norfolk Mortgage Trust provides stability and peace of mind during market fluctuations, ensuring investors’ long-term financial goals remain on track.
*Norfolk recommends speaking to a qualified financial adviser before making investment decisions.