Short, sharp recession vs Great Depression Mark II?
A long-term investors perspective
Author: Implemented Portfolios
Last week we were joined by renowned investment strategist Tim Farrelly for our first session of “The Locked Down Adviser’ webinar series.
Considering the state of the current economic climate, we thought it timely to have Tim on as our first guest to answer some of the big questions regarding market movements.
When asked about some of his short term versus long term thoughts at the moment, Tim responded that “one of the fundamental things we all need to do is work out where our skill sets lie when it comes to investing. In Asset Allocation there are those who are primarily interested in the short term, and then there are those who identify that they have very few skills that enable them to say what’s going to happen this week, this month or even in a years’ time”. Tim identifies himself as being in the latter group.
He goes on to say, that this is one of those times where “the short term is really murky, but the long term is much clearer”. In the long term we have a couple of major scenarios to consider and it’s really going to be about “how we get out of the recession we are almost certainly in right now.”
He stated that someone worried about the short term (where prices are concerned), may be thinking –
- When will they find a cure?
- When will they lift the social distancing rules so we can all go back to work?
- When will restaurants etc re-open?
- When will the economy return back to normal?
Added to this would be whether these things are reliant on a vaccine or a COVID-19 test, along with a variety of other factors.
Tim expressed that he doesn’t have any real idea on these things. Rather, that his focus is much more centered on what the world will look like in 5 years’, 7 years’ and 10 years’ time as a result of what we are going through now. And how is that now different than if you had asked him the same question in the middle of January?
For the full session and to delve deeper into some of Tim’s insights, click here to view the webinar recording.