Page 20 - DIY Investor Magazine Issue 24

HOLDING ON TIGHT
After a few decades of investing, it’s tempting to think that you’ve seen it all; but the stock market, not to mention the real world, never fails to surprise.
TAKING STOCK
It feels like we’re through the first phase of this crisis right now; most developed countries are in lockdown and we’re waiting for new cases and deaths to decelerate, level off, and then hopefully decline.
It’s amazing to see so many people rally round and help others, not to mention the courage of those on the front lines of the NHS and other vital services.
Attention is already shifting to how long the lockdown will continue for and how quickly the restrictions might be lifted’; I expect most governments to be overly cautious, although things may speed up if China and South Korea don’t see cases rise again.
Stock markets have risen a little from the lows of 23rd March and we’re seeing fewer days with major market moves.
But who knows what will happen next? Markets only started falling on February 20th, so did we really see the bottom less than five weeks later? This crash has set records left, right, and centre; maybe it will surprise us on the way up as well.
The flip side is global markets are just back to the level they were in late 2018, having reached that point for the first time in mid-2017; on that basis, the fall looks a lot less severe.
A BRUISING THREE MONTHS
Despite a fall of just over 15%, I don’t feel too bad about my portfolio’s performance as most major markets have dropped even more.
The S&P 500 in the US is down some 20% and the UK market has fallen nearly 25%; a decline in the value of the pound against the dollar has meant global markets in sterling terms ‘only’ declined 17%.
UK markets were supposedly cheap at the start of 2020 but that hasn’t stopped them under performing yet again; the big weighting towards oil stocks in the FTSE 100 hasn’t helped but there have been heavy drops more or less across the board.
Two-thirds of the FTSE 100 has dropped by 20% or more this year; a tenth has dropped by more than 50%!
PORTFOLIO / BENCHMARK
Vanguard FTSE Global All Cap (fund) Vanguard UK All-Share Index (fund)
Q1 2020
-17.0% -24.8%
SINCE JAN 18
-3.6% -19.1%
My portfolio
-15.1%
+4.3%
Vanguard Life Strategy 100 (fund)
-18.0%
-5.8%
DIY Investor Magazine | Apr 2020 20