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Cross Contagion

9 March 2020 |Investment strategy
Learn how unlocking the value of your investment portfolio using a margin loan can help build wealth and achieve your financial goals on a chart background.

Cross Contagion

9 March 2020 |Investment strategy

Equity markets react to concerns about COVID-19 pandemic

Markets are reacting to news that COVID-19 seems to be spreading outside of China, a precondition for calling it a pandemic, and the second-order impact on the Australian economy.

Stories about pandemics can be scary. Smart investors will remember their goals and investment strategy before getting caught up in daily headlines.

Firstly, put the recent share market fall into context. Some sectors of the Australian economy may experience a hit if fear of pandemic spreads. But investors who have a medium or long-term investment horizon need to look at business prospects over the next five to ten years.

Few bad news stories come without opportunities, and even long-term investors may be able take tactical advantage. Prepared investors may be able to ‘buy on the dip’. Some investors who hold shares that have increased price, for example gold miners, may want to tilt their portfolio towards investments that may have succumbed to short term panic selling.

No one can predict the unpredictable such as a pandemic. Tactical maneuvers to take advantage of short-term market jitters are not suitable for every investor. But smart investors know to be prepared for opportunities.

A margin loan gives suitable investors access to additional investable funds and the flexibility to adjust their portfolios without the need to sell long-term investments.

If you have any questions about how a margin loan can help you achieve your financial goals, call the team at Leveraged on 1300 307 807.

Gearing involves risk. It can magnify your returns; however, it may also magnify your losses. Issued by Leveraged Equities Limited (ABN 26 051 629 282 AFSL 360118) as Lender and as a subsidiary of Bendigo and Adelaide Bank Limited (ABN 11 068 049 178 AFSL 237879). Information is general advice only and does not take into account your personal objectives, financial situation or needs. The views of the author may not represent the views of the broader Bendigo and Adelaide Bank Group of companies (“the Group”). This information must not be relied upon as a substitute for financial planning, legal, tax or other professional advice. You should consider whether or not the product is appropriate for you, read the relevant PDS and product guide available at www.leveraged.com.au, and consider seeking professional investment advice. Not suitable for a self-managed superannuation fund.

Examples are for illustration only and are not intended as recommendations and may not reflect actual outcomes. Past performance is not an indication of future performance. The information provided in this document has not been verified and may be subject to change. It is given in good faith and has been derived from sources believed to be accurate. Accordingly no representation or warranty, express or implied is made as to the fairness, accuracy, completeness or correction of the information and opinions contained in this article. To the maximum extent permitted by law, no entity in the Group, its agents or officers shall be liable for any loss or damage arising from the reliance upon, or use of the information contained in this article.

 

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