Vistafolio Update: How Is the Coronavirus Impacting Our Economy?

Vistafolio is Wealth Morning’s Managed Account solution for Eligible and Wholesale Investors.  Once a month, we update account holders on the strategy and performance. Please find our latest update as follows:

The coronavirus market correction has been the sharpest and most vicious I’ve seen since the GFC. It threatens company earnings, especially businesses reliant on China — like travel, tourism, and food.

We visited an Angus beef farm over the weekend. The farmer described the perfect storm facing him. Drought conditions. The slaughterhouses no longer wanting animals since exports to China slowed up fast.

This is how earnings get impacted. And fear pulls down company share prices.

But the fear seems worse than the reality. The common flu kills far more people. And the green shoots of a buying bounceback are starting to show. Although we could be in for a long haul, given the delayed earnings impact.

If you’re wanting to expand your portfolio — now could be a good time to top up your account. 

 


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Some rare value is evident. But we don‘t yet know if this correction has reached the bottom or whether it is descending into a wider, fearful crash. I suspect the brave will profit in the long-run. And the rich, as they usually do.

Over the composite managed-accounts portfolio, February 2020 saw the worst drawdown since recording performance in 2014. Down -7.70% gross for the month across the composite portfolio (total aggregate, weighted return across all significant portfolios following the strategy).

Please see our performance chart for more details.

But this is the nature of financial markets. Occasionally we have burn-offs. This one, like the Australian bush fires, is widespread and aggressive. In time, the burn-off leaves a wake of fertile conditions for regeneration.

As Warren Buffett has noted — if you‘re in the market for the long haul, this is a time to wait and see. And maybe what he‘s not revealing is that he may be nibbling into some buys with his mountain of cash.

 


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Regards,

Simon Angelo

Editor, WealthMorning.com

Past performance is not an indicator for future performance. Your actual portfolio will differ from the composite portfolio mentioned. The information contained in this document does not constitute an offer to sell or a solicitation to buy an investment, nor should it be construed as investment advice. Vistafolio investment services are available to Eligible Investors and Wholesale Investors (not to Retail Investors) as defined in the Financial Markets Conduct Act (2013).

 


Simon is the publisher at Wealth Morning and has been investing in the markets since he was 17. He recently spent a couple of years working in the hedge-fund industry in Europe. Before this, he owned an award-winning professional-services business and online-learning company in Auckland for 20 years. He has completed the Certificate in Discretionary Investment Management from the Personal Finance Society (UK), has written a bestselling book, and manages global share portfolios.


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