The impact of COVID-19 on your investments

Markets across the globe, collapsed in March, and although these have somewhat recovered in April, if you received your quarterly statements you would have seen a drop in your market value. This can be quite frightening, and you may have a feeling that you need to do something. 

It is best not to change your investment strategy, as you need to be in the market to enjoy the recovery and a move to cash will lock in losses. 

Luckily, history is on your side, the table below shows the South African equity market’s 10 biggest declines since 1960, in addition it shows the subsequent returns after the lows.  

Additionally, the interest rates have been cut by more than 2% since the beginning of 2020, so you will not achieve inflation plus returns in cash. In the short term it is wise to accept the ups and down and remain invested.