Investors pragmatic as coronavirus decimates stock markets
17 March 2020
A survey of 606 investors conducted between 13th and 16th March shows that the majority think that the economy will get worse between now and the end of 2020 and they expect the FTSE to fall further this month.
However, investors recognise the opportunities that the current investing climate poses. The majority expect to buy rather than sell – people want to ‘buy cheap’. And, most are planning to sit tight and wait for a recovery rather than make significant changes.
People are more positive about their personal financial situation than they are about the wider economy
Only 29% think their personal finances will get worse between now and the end of 2020, compared to 52% for the UK economy and 51% for the global economy.
Over half think the FTSE will continue to fall
“The FTSE has fallen by nearly 30% in the last month (at the time of writing). What do you think will happen to the FTSE over the next month?”
51% of people think the FTSE will fall by more than another 5% over the next month – 10% think it will fall by more than 15%.
Those who expect a fall of more than 15% shared that they think the markets have not yet realised how seriously business will be affected.
More investors see this as a buying opportunity rather than a time to sell
• 54% of investors say they intend to buy, compared to only 2% who say they will sell. 37% say they will make no changes.
• Those who plan to buy give the following reasons: – great buying opportunity
– no plans to cancel direct debits
– investing for long term
– expect a similar recovery to 2008
– bargains to be had on specific stocks
– want to use their ISA and pension allowance
– wanting to buy cheaply
• 45% of those aged 18-44 say that this is a good time to get into the markets.
• Only a very small minority (5%) say they are “freaking out” and have no idea what to do. The most concerned are those nearing or in retirement.
Holly Mackay, CEO of Boring Money, comments:
Although the majority of investors anticipate further falls in the FTSE, on balance people see this as a long-term buying opportunity. Interestingly those buying are planning to stick to broad global trackers, not feeling confident enough to make sector-specific calls at this time.
NOTES TO EDITORS:
1. These figures are taken from an online survey conducted with Boring Money readers between 13th and 16th March. We received 606 responses from readers who currently hold investments i.e. funds, shares or bonds. For more information, please contact firstname.lastname@example.org
2. Consumer verbatims around whether the markets will rise or fall:
Think it will get worse…
“Panic breeds panic and the virus situation and related uncertainty is in its early stages - I imagine that things will get worse before they get better and we have not reached the peak yet.”
“Impact hasn't fully been felt yet. Not sure the uncertainty has been properly priced in by markets. So further drop likely but not as severe as seen.”
Think it will stay the same…
“I think that in the next month the situation with corona virus will continue to cause uncertainty. Greater restrictions are likely to come into effect, which will cause more disruption in the next 30 days. However, after that we are likely to rebound.”
“Hopefully the FTSE has bottomed out now and traders and investors will stop panicking? Maybe!”
“I’m not experienced in investing or watching the stock markets. Don’t really know what will happen but I’m planning to just keep my ISA ticking over.”
Think it will improve
“Given where things are now I think there will be a general improvement nationally and worldwide. That tends to take longer to filter to individuals.”
“I think that the existing situation will be short lived and we will return to normality. I also think that our negotiations with the EU for a trade deal has improved as a result of this virus. The EU will be affected more severely than the UK. We need to take advantage of this.”
3. Consumer verbatims around buying and selling intentions:
“Will carry on monthly buying into SIPP and ISA funds as before on the basis that things are currently cheap and the market, I hope, fingers crossed, will start to recover.”
“Am planning on investing some money. Was going to do it anyway, but this seems a good time with everything "on sale" to further invest in my S&S ISA. Keeping a buffer in cash though as ready money.”
“I wouldn't sell at a huge loss, so I'm happy to sit and wait till the market rises again. We don't really have spare cash to invest at the moment, as my husband and I are recent retirees. We need our cash reserves to live on as we don't want to take anything out of pensions while they are reduced in value.”
“I can't buy more as I don't have the additional money to invest but will continue investing. I benefited from the 2008 fall in prices so hopefully will do the same again now.
4. Consumer verbatims around worries and concerns:
“Being in my 60s, I am a little worried. Once the market comes back up, I need to take a hard look at where my money is.”
“We have seen it before in 2008, and I know it recovered then, but I'm still uncomfortable about it. We do have cash reserves to live on but hope it's not too long before we can reasonably start taking flexible drawdown again.”
“I spent the last year learning about investing and getting myself into a position to begin doing so. But wish I had more knowledge on buying individual companies, as this is a fantastic opportunity when dust settles.”
“I really do think it presents opportunities, but I only have a small amount to invest. I'm not selling, I'll make too much of a loss and don't NEED the money right now. May as well leave it where it is and hope the markets pick up at some point. Might try and crystallise some gains at that point.”
“I wasn't alive last time it happened this way, but I do know it did. I've been waiting for markets to fall but didn't expect it to be this bad. I'm worried about all sorts of things but nothing I can do anything about. If it gets really bad (4 meals from anarchy) I suppose losing the money will hurt but it won’t be the priority any more...”
5. Boring Money is an independent research and content business which provides information, tips and Best Buys to consumers. The business conducts regular research with industry providers and consumers and looks at the developing DIY investment market from both the customer and provider perspective. Boring Money holds test accounts with 30 providers and also holds regular focus groups and interviews with consumers to ensure regular input and feedback from the user perspective.
Founder Holly Mackay has worked in the investment industry for 20 years and is supported by a team of 15 researchers, analysts and marketing execs. Boring Money is not regulated to give personal financial advice, nor is it regulated by the industry watchdog.
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