Why Covid-19 is teaching investors a lesson – The National

Why Covid-19 is teaching investors a lesson – The National

With so much uncertainty emerging from the first quarter of this year, investors should tread very cautiously from. As the first quarter of 2020 has shown us, markets have a unique ability to teach investors new lessons.. The combination of fixed income carefully balanced with equities is a better way to address the current uncertainties in markets than to be holding large amounts of cash and trying to time an entry point.. Corporate earnings are set to see significant downgrades.. S&P 500 earnings expectations started the year around $175 in earnings per share and many are now expecting a number in the $130s.. For fixed income, the first quarter started with a strong standpoint and we were looking at the full duration of around seven years and high credit quality.. By the end of the quarter, credit spreads had widened to such a large degree that switching to 3 per_cent from our core bonds back into high yield was inevitable.. Although equities will go higher in the medium term, short-term risks are still skewed to the downside as the full impact on corporate earnings becomes clear.. With the situation likely to worsen over the coming month or two and volatility