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Corona crisis: comment on the current market situation
June market update

Jun 30, 2020.

Do you wonder what the current turbulent market situation means for your retirement provision? As a leader in qualified provident insurance, Generali is monitoring the market closely during the corona crisis. Although reliable forecasts are difficult at present, our investment experts have defined a few simple rules to follow.

Strong equity markets despite weak economic data

Media headlines on the economic situation in recent months often could not have been worse. A few examples illustrate the current situation: “One in ten Americans unemployed”; “Swiss economic output plummets more than 6%”; and “Central banks rescuing insolvent countries and companies”. The view on global equity markets is a different one. After sharp declines in March this year, they have recovered strongly. Technology-driven stock indices such as the NASDAQ have even reached new record highs.

“Draw up a long-term investment plan so you can sleep well, even in turbulent times.”

 

Tobias Müller, Expert Investment Coordinator, Fortuna Investment

What should you do if you want to invest now?

Equity markets have risen steadily over the past hundred years. Someone who invests regularly will sometimes buy at close to an all-time high. With a really long-term time horizon, as is the case with life insurance, for example, this also works very well, because short-term stock market upheavals have little to do with long-term return expectations. The rules we described for navigating the outbreak of the COVID-19 crisis continue to apply:

  • Investments made in the pensions segment are for the long term. You should stick to your plan and invest regularly.
  • A severe slump in the markets is also an opportunity. Investments made in periods of crisis prove to have the highest returns over time.
  • It is hard to judge the perfect time to get started.

 

For these reasons, it is worthwhile continuing to invest regularly. You should not look for the “perfect” time to invest. If the market slumps again, however, you can also take the opportunity to make investments in addition to your regular premiums to benefit from the market dislocation.

 

Do you have any questions about your investment? We would be happy to discuss them with you.