Investment market update - Omicron

I'm building my wealth | | 2 min read

 

Last week saw a bout of volatility in financial markets which culminated in losses of around 2-3% on Friday across some of the major global equity indexes. This was due to news of a discovery of a new COVID variant, discovered initially in Botswana, southern Africa. On 26th November the World Health Organisation (WHO) announced the new Covid variant, naming it Omicron, and classified it as a “variant of concern”. Cases have already been detected in Australia and in some other European countries including the UK. Border restrictions in some countries have been reinstituted.

The classification of Omicron as a “variant of concern” by the WHO is important as it may indicate increased transmissibility or disease susceptibility. Also, that public health measures, including vaccines and therapeutics, may be less effective. However, it will likely be several weeks or even months until enough testing is performed to draw a more complete conclusion. 

As we know, financial markets do not like uncertainty. So, in this intervening period we should expect continued volatility as markets struggle to attain the impact on growth and inflation of the new strain. Diversification is the key element in managing risks within a portfolio, and our portfolios are exposed to thousands of underlying investments, across the world. This ensures the impact of any one event is reduced. We also know that short term returns can be very volatile, so we focus on the longer-term outcomes which are the most important for building long term, sustainable wealth.


Issued by Togethr Trustees Pty Ltd ABN 64 006 964 049, AFSL 246383 ("Togethr"), the trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017 ("the Fund"). The information contained herein is general information only and does not take into account your personal financial situation or needs. You should consider whether this information is appropriate to your personal circumstances before acting on it and, if necessary, you should also seek professional financial advice tailored to your personal circumstances. Where tax information is included, you should consider obtaining personal taxation advice. Before making a decision to invest in the Equipsuper Superannuation Fund, you should read the appropriate Product Disclosure Statement (PDS) and Target Market Determination for the product which are available at equipsuper.com.au.  Financial advice services may be provided to members by the trustee’s related entity Togethr Financial Planning Pty Ltd (ABN 84 124 491 078; AFSL 455010). *Past performance is not an indication of future performance.

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