Updated: Jul 31, 2020
What Happens Next?
"While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks."
(Quote by Federal Reserve Chairman Jerome Powell)
The immediate future is one of uncertainty, that we can be ‘certain’ of, equity markets are volatile and unpredictable, real estate is still predicting a ‘buyer’s market’ as the prices are set to fall and the travel industry is being turned upside down and calling for new safety measures on travel. The hospitality industry came to a complete close for those who were unable to modify their operations to keep their businesses running, and for a brief moment it felt as though the entire world had come to stop.
The ‘New Normal’ has been about promoting work from home initiatives, and I am fortunate enough that the lockdown and social distancing measures have not had any effect on me being able to do my job. I use a variety of different digital platforms to communicate with IFA’s and Wealth Managers globally, however this is not the case for millions of people worldwide and I have to ask myself what will the future of non-customer facing industries look like?
At present the answer has been to keep people at home and to provide stimulus packages for furloughed employees who’s employers have had to cease operations, the UK Government for example are covering 80% of salaried workers paychecks among other initiatives. While on the face of it many are being able to stay at home and be paid to do so, how long is this approach sustainable and what further economic repercussions are likely to ensue once the ‘New Normal’ has been put into place?
‘What happens next’ is a term I am frequently coming into contact with as people everywhere try to plan for the future of a post Covid-19 reality. Whatever is being scripted news reports are hinting that much like the Spanish Flu of the 1920’s, we are due a second wave which will bring a second round of lockdowns.
Uncertainty breeds fear as does the feeling of not being able to control the environment around you. One thing we can manage, and control is ourselves, we choose how to handle the situations we are individually faced with. For investors, it’s about contacting their IFA’s to discuss their portfolios and for IFA’s it’s about contacting their clients.
As with any market crash, there are always companies that close, some big and some small, especially companies who make things. With that in mind, there are likely to be IFA’s whose clients have been made redundant recently and no longer have a salary. There will also be IFA’s whose clients are not yet unemployed or who are highly unlikely to be made so. Whichever status applies, utilising a portion of a current portfolio to generate a second income might be something to consider.
If you are an IFA and would like more information on secure income generating investments for your clients please contact:
Accruvis Investment Solutions