As the Covid-19 pandemic spreads we have seen all markets and asset classes in turmoil. Major equity indices have seen falls of 30% and more with indiscriminate selling across all sectors. Investors have sought safe havens such as bonds, gold and even Bitcoin. But are these assets really safe havens in the current environment? US 10-Year yields have risen from 48 basis points (bps) to 1.18bps, 10-Year gilts have risen from 16bps to 87bps in little over a week. Gold has fallen from a recent high of $1675 to $1487 and Bitcoin has slumped from $10,000 to $5,600 in a little over a month. Cash has been the standout asset class, but if you believe in the Armageddon theory, is it in the bank or under the bed?
BAM are still of the view that investors should remain invested in these volatile and turbulent times. We continue to monitor all funds within Mazarin, and are regularly in contact with the portfolio managers to seek their opinions and actions. We stay committed to our view of “the power of staying invested”, but are always ready to act on new opportunities or threats. We readily admit that we do not possess a crystal ball and cannot predict how events will pan out, but history tells us that markets will recover once the dust has settled.
“Be fearful when others are greedy and greedy when others are fearful.”– Warren Buffett