While we stay safe at home, we’re also getting overwhelmed with opinions and news about the current situation, and the more we browse through social media for answers, the more we’re getting information that triggers our state of mind to take some sort of action. 

Although we are living in unprecedented times, the market has been through similar events in the past. It’s true, volatility may not have been this high and the correction that swift. In a matter of days, markets seem to have fallen off a cliff, losing over 30 per cent in value in just two weeks. The last market crash of 2008-09 was relatively more gradual, taking around 12 months to materialise, although in the end, we lost a total of 50 per cent. Surely, now this event caught everyone by surprise and without words.

Maybe there could be more in store for us as we have to go through tougher times but there seems to be a consensus and determination that this is only a temporary interruption to our lives. We will eventually return to normality where we experience recovering economies. We know that mankind has survived through similar events and even worst than that.  On a positive note, we never experience a time where we see everyone working together with the sole aim to fight this pandemic.

This is so positive, watching this unity that literally fills everyone with hope that we as human beings are ready to put away our differences and unite for a common cause. What's been promised by governments and central banks to ease the suffering of people who may lose their job and companies going through rough times where their business either had to shut down or drastically slowed down, is encouraging. Huge government budgets are being proposed for this purpose, interest rates have been lowered, moratorium on loans have been promised.

As such, political leaders seem fully committed to this fight and even ready to 'do whatever it takes' to limit bankruptcy or job loses to a bare minimum. This fills us with courage and hope that we don't need to panic as these unprecedented times will pass and we will revert to our normal lives. Looking at the current situation and the drawdowns registered by investors in their portfolios, people may get extremely worried especially hearing a lot of things happening and with the environment filled with 'doom-and-gloom' news.

Consequently, you may think that a good chunk of your investments or pension plan has been lost but this does not actually happen until you decide to liquidate it. What you are seeing is a 'paper loss' and you would do yourself a favour not to look at your portfolio if your intentions are only to count your losses. Look only if your objective of investing was always for the long term. What is wise to do at the moment, if you are worried, is to call your financial advisor.

Looking for reliable sources and professional advice to find comfort and assurances about your investments is key. Surely, your advisor would have experienced similar situations in the past and should have a good idea of how such situations in the market evolve. Furthermore, an advisor can provide not only words of comfort but guidance how you can navigate through all this and possibly step-by-step actions by drip-feeding into the market and taking advantage of low prices.

Admittedly, it’s easier said than done to ignore what is happening around us but try to be optimistic as much as possible and behave as a contrarian. Maybe your tolerance to risk is low, and you may need to make some adjustments to your portfolio because your pension age is near as otherwise you may risk losing more money in the short-term, depleting your reserves in retirement.  Just remember the words you may have heard from your advisor, that the best moment to invest is when markets decline. Most probably you agreed with this advice and prepared to act when the moment occurs.

So, now this is it, the moment you were waiting for. Will you do it? Of course, you are scared. If you're not, you're not living the reality. Your gut instincts are telling you to stay away from the market. However, it doesn't mean you cannot reflect and look at the big picture. You have to have the conviction to be looking at the situation from a different perspective, the bottle is half full half empty, as the saying goes.

So, all major assets are at bargain prices at the moment and it has been a long time since we've seen them at this level. Most probably you bought the current investments you hold when prices were higher than they are today. Probably you are holding them because you have hope that their value will be restored. So you have a sense of believe that things will eventually be fine. It’s time to have that courage and conviction to dip into the market and top-up that pension or savings plan you have or that diversified portfolio of managed funds.

In my opinion, with current low interest rates that we've been experiencing for a number of years, our investments are not going to grow much in the short term. However, think about how this market correction once it turns around can propel the value of your portfolio if the market will continue its journey way up before it was interrupted. If you think you have some extra cash that you can put it to work, so now is the time.

Disclaimer: Joseph Buhagiar is a financial advisor at Calamatta Cuschieri. For more information visit www.cc.com.mt. The information, views and opinions provided in this article are solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.