When the famous Russian author, Leo Tolstoy, wrote, ‘The two most powerful warriors are patience and time’, he could not have foreseen how perfectly it would sum up today’s global predicament.

There is heightened uncertainty around the impact that Covid-19 (worsened by the recent Moody’s downgrade on SA government bonds) is currently having on markets and explains the dramatic volatility in markets in recent weeks.

There is a strong chance that beaten-up sectors such as energy and financials will lead the eventual recovery from the coronavirus crash, according to Sanlam’s Pieter Fourie – but the manager said this is not enough to convince him to buy into these areas of the market.

As far as equity markets are concerned, the development of the coronavirus crisis has been as rapid as it has been unprecedented.

Like many developing countries, the South African government relies on funding to build and maintain the infrastructure of the country. To enjoy continued access to loans (in the form of government bonds) at affordable interest rates, it’s important that we keep our credit rating healthy.

After weeks of falling asset prices, markets have started to recognise the value in beaten down stocks. Volatility has declined whilst both equity and bond markets have stabilised slightly.

In the midst of what has been an extraordinary period of market volatility, please see below a video update from our Chief Investment Officer, Phil Smeaton, in which he discusses what has happened in global investment markets of late, what it means for us as investors and why now is a bad time to panic.