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  • Rachael Ooi

The effect of Coronavirus and your money

The last thing you probably want to read about is more Coronavirus and how it is affecting you and your finances. However, it is affecting each and every one of us in one way or another.


When I left to go away on a family holiday 2 weeks ago I had no idea of the pandemonium that awaited us. We innocently left to go to Sri Lanka to go to a wedding and see my brother who lives there. Little did we realise the events that Coronavirus would unleash during our time away. Let’s face it, wherever you are in the world at the moment, fear has gripped the globe. The speed and vast reach of this virus has sent the globe into unprecedented lockdown. Currently 173 countries out of 195 have been infected with the virus and has caused toilet paper crisis and panic buying throughout the world. It seems that this may only be the beginning of what appear to be very dark times.

Thankfully after cancelled flights and a couple of false starts we were able to secure tickets on an early flight home via Hong Kong. Obviously not the ideal place to fly through however there were few alternatives. The Sri Lankan government were very quick to act on dealing with the outbreak and locked down the country and their citizens the night we left for the foreseeable future on home isolation. When we first arrived, there were only a few cases of the virus in the country. The country now has only 95 cases with no deaths and they have a similar population to Australia in a country that is 118 times smaller than ours, they have been relatively lucky. The risk of outbreak is far greater given Sri Lanka is largely a cash society and the vast majority of the population live in very close proximity to one another. The Sri Lankan government are being very cautious, and it appears we got out just in time.

We arrived at Colombo airport to increased security, having our temperatures taken at each check point and after a nervous wait we were relieved to see the departures board in the sea of red CANCELLED flights that our flight had a large green CONFIRMED sign against it. Inside the airport there was an eerie feeling…. Most passengers were sporting surgical masks, some with latex gloves and one guy wearing bright green swimming googles to top off the look, yes there was a general sentiment of fear in the air.

Upon arrival at Hong Kong airport it became obvious that passengers there were also scared. Everywhere we looked passengers were dressed in Hazmat suits and face masks. It was obvious that passengers there were taking every precaution to ensure their safety. Again, we waited hoping and praying that our flight would not be cancelled and fortunately it took off on time, less than half full. I was saddened to hear from the cabin crew that this was their last flight and they were being stood down for an indefinite amount of time, something that many of you would be experiencing. I thought long and hard about the impact that this would have on their families and the stress that this would cause on their financial wellbeing. Thankfully we got home and are now safely in isolation, a place I am happy to be.

Which brings me to topic, the financial world has been another victim of this pandemic. Like every aspect of the world the financial markets are in a state of crisis. What we are experiencing is a black swan event. A black swan event is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. It is characterised by extreme rarity and their severe impact.

So what can we do in this time of trouble? Well I urge you to think before you act. If you look at history, after a crash there is always a recovery. Unless you absolutely need to sell any assets at this time, don’t! You don’t actually lose anything until you sell, therefore if possible ride out the wave and wait for the recovery. Money is a very emotional thing, it is what you have worked for and it is your livelihood. However now is not a time to not deal with things in an emotional way. It is time to be logical. As human beings we are terrible investors, we feel the lows more than we feel the highs and therefore are more likely to sell when the chips are down and buy when stocks are high. In an ideal world without emotions, we would sell when assets are high to gain the maximum benefit and buy when stocks are on sale, when the market is low. Think very carefully about the decisions you are making. If in doubt contact your advisor or give me a call to discuss before you make a decision.

Keep positive and do what Australians do well…Be a good mate, look after yourself, your family and your neighbours. Have faith in the financial markets and the historical recovery statistics that we have. Regardless of the countless wars, other epidemics and political and social events that have occurred, the general direction of the financial markets over time despite the dips and troughs is always up. Hang in there!


We're happy to talk, chat, vent and email with you if you need! Reach us on 07 3211 8600 or rachael@yourwc.com.au

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The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.

 

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