Most investors will have concerns over their cash flow during the coronavirus crisis but some will still have cash to stake n the financial markets – so what should they do?
Value seems to be the problem, or at least calculating how much a company or fund is worth as the FTSE and Wall Street seem to be pulling out of a dive to oblivion.
Central banks are desperately trying to bolster the economy by offering some respite with unprecedented financial support that finally seems to be paying off.
One market expert, Helal Miah, an investment research analyst at The Share Centre explains what it means for investors.
“We still have to find out in the coming weeks and months whether stimulus and support measures will have been enough to stave off more than just a short and sharp recession. However, for investors with cash in the side lines, we believe now may be a good time to start dripping money back into the markets for the long term,” he said.
“In comparison to recent weeks, we saw some relative calm on the markets yesterday and this flowed through to overnight markets in Asia. The UK and European markets have opened up by around 5% amid the vast amounts of support that central banks and governments around the world are providing to their respective economies.
“The Bank of England’s rate cut to an unprecedented low of 0.1% and another £200 billion of bond purchases have helped and there is an expectation that Chancellor Rishi Sunak will announce another rescue package aimed at supporting companies to retain staff instead of making layoffs.
“There is the inevitable hit to the economy and likely recession to come along but most important for the subsequent recovery is that people are in jobs and unemployment does not get out of hand. Monetary policy, which is a rather blunt instrument, is not likely to solve these acute issues on its own and will always work better with targeted policies such as those likely to be announced by the Chancellor.”