Market Update

As illustrated in the accompanying table, it's undeniable that this week has been exceptionally challenging. Undoubtedly, many of you are concerned not just about your financial investments but also about your health.
Given the recent volatility in global equity markets over the past three weeks, it's completely understandable if you, like many of our clients, are feeling uneasy. I want to assure you that your portfolios have been strategically diversified across various asset classes. While this diversification hasn't prevented declines, it has served to mitigate more substantial losses. For instance, as of the close of trading on Friday, March 13, 2020, the FTSE-100 has dropped by 29.60% since the last Portfolio Valuation Statement dated January 5, 2020. In comparison, a typical Cautious risked client's portfolio decreased by 12.63%, Balanced portfolios by 20.20%, and Adventurous portfolios by 20.50% over the same period.
We recognize that the news about the coronavirus dominates headlines and we empathize with the unease caused by the current weakness in the equity markets. However, it's crucial to maintain a long-term perspective and resist the temptation to react impulsively to every new rumor or development. We meticulously structure and manage your portfolios to ensure they remain well-diversified and aligned with your long-term goals, time horizon, and risk tolerance.
Market uncertainties and volatility are inevitable, and the current situation is no exception. My wealth adopts a long-term approach to investing because evidence consistently shows that this approach leads to better outcomes. The cumulative time spent in the market is more crucial than attempting to time specific market movements.
Equity markets tend to react strongly to uncertainty or disappointment, a tendency exacerbated by the scars of the 2008/9 global financial crisis. Unfortunately, the current panic gripping financial markets appears to be indiscriminate and emotion-driven. We believe that a swift rebound for global equity markets might not require an abundance of positive news.
While the proactive measures taken by the Bank of England and the UK government, coupled with a coordinated stimulus package, failed to ease market concerns this week, we find a silver lining in the sharp decline in oil prices. This drop effectively acts as a substantial tax cut for consumers, partially compensating for the economic challenges faced in Europe and the US. To put it into perspective, global oil consumption, at approximately 100 million barrels a day, witnesses a decline in the cost of a barrel of Brent from $69 at the start of the year to just $33 now. This $36 decline translates to approximately $3.6 billion of stimulus per day, totaling a staggering $1.3 trillion per annum.
Consequently, while we anticipate ongoing market volatility in the short term, we maintain confidence that global equity markets will recover by the end of the year.
In these turbulent times, we will continue to provide daily market updates. Please stay tuned, as we will offer our insights on significant global events. For example, on Monday, March 16, 2020, we have the US Empire State manufacturing index; followed by retail sales data on Tuesday, March 17, 2020. Additionally, on Wednesday, March 18, 2020, a Federal Reserve monetary policy meeting is scheduled, which holds more significance than usual. We anticipate aggressive interest rate cuts and the groundwork for additional stimulus measures, including further Quantitative Easing (QE) and lending facilities. Furthermore, on Monday, we have Chinese retail sales data, and on Tuesday, March 17, 2020, we anticipate UK employment data, including the unemployment rate and weekly earnings.