Emotive investing is arguably one of the biggest downfalls of many investors. A knee jerk reaction to sell during turbulent market periods can mean missing out on that all important recovery growth. When the markets look bleak, it is important to remember exactly why we find ourselves in this position in the first place – investments can be unpredictable.

The S&P 500’s rise of 0.47% on 17th March was the first day in over a week in which the index had moved less than 5%. For perspective, throughout the whole of 2019, the index did not move by more than 3.5% in a single day. These statistics demonstrate exactly why investors can become fearful and flee to hard currency.

As we recently covered in our February newsletter (download here), research suggests that the years directly after a bear market are those which provide investors with the best returns. Having the courage to ride out the darkest times in the market is the key to long term investing.

“Success is never final. Failure is never fatal. Courage is the only thing.”

– Winston Churchill

When we look toward the current climate and the effect which COVID-19 is having on the world around us, it must be remembered that medical experts everywhere are working round the clock to bring the pandemic to an end. The virus was the catalyst which sparked the market sell off, but it could also be the water which puts out the fire.

“In the near to medium term it is important to remember that if you are getting unduly bearish, you are fighting the Fed and nearly every central bank and government in the world along with the single-minded dedication of various health care professional and scientists to find a cure/vaccine. Think hard and rationally about your odds!”

– Amit Lodha Portfolio Manager Fidelity International 23rd March 2020