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Investment market update - Omicron

Investments  |  30/11/2021  |   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.

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This information is provided for general information only. It does not take into account your personal objectives, financial situation or needs and should therefore not be taken as personal advice. You should consider whether it is appropriate for you before acting on it and, if necessary, you should seek professional financial advice. Togethr Trustees Pty Ltd ABN 64 006 964 049, AFSL 246383 ("Togethr") is the trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017 ("Equip" or "The Fund"). Past performance is not a reliable indicator of future performance.

Togethr Financial Planning Pty Ltd (“TFP”) (ABN 84 124 491 078, AFSL 455010), trading as Equip Financial Planning, is licensed to provide financial planning services to retail and wholesale clients. TFP is owned by Togethr Holdings Pty Ltd (ABN 11 604 515 791). You can obtain the TFP Financial Services Guide and/or Privacy Statement by contacting our Helpline on 1800 682 626. This is general information only and does not take into account your personal objectives, financial situation or needs and therefore should not be taken as personal advice.

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