Tag: low inflation

You have just lived through an exceptional part of history. No, I am not talking about the COVID-19 pandemic, although it does play an important role in what we think about as the Great Unwind. Rather, I am talking about the extraordinary period of low inflation we have seen over the past few decades.

Welcome to the ‘new normal’, they say. You see, something’s always considered the ‘new normal’ until yet another ‘new normal’ comes along. Granted, at times, the ‘new normal’ does actually stick. However, most of the time, it’s just noise and like the doppler effect, it will soon fade away.

Bouts of market volatility may be unsettling but they are an unavoidable feature of long-term investing. The important thing is to avoid making mistakes along the way. These investment guidelines hold true for any environment, but they’re particularly useful to keep in mind during times of extreme volatility.

Three months ago, investors were looking forward to an improved year of global growth and corporate earnings. That was then. The coronavirus crisis is an era-defining event; one which will have a significant impact on not only how we live, but also where we invest.

Local investors should stay invested to reap strong future returns. An early decisive response to the COVID-19 threat should contain the spread of the virus in South Africa, but the economic repercussions in the short term will be costly. Local measures to contain the virus will add to an already weak economy and negative global impact.