WUHAN CORONAVIRUS – how deadly is it to your investments?

A novel coronavirus is bad news, and certainly a tragedy for the families who have lost their loved ones.

Many globally have blamed China, bat soup, and the unhygienic conditions; while the Chinese are blaming the Wuhan government for its delayed response.

Yet, is the current 2019-nCoV coronavirus as dangerous as it sounds?

In order to have a clear perspective, perhaps we could ask these questions:

How many 2019-nCoV cases are there so far? 6,1451.

How many SARS cases were there (over 8 months)? 8,0962.
And what’s the number of deaths so far from 2019-nCoV? 1321.
What about SARS? 7742.

And the number of deaths caused by the seasonal influenza annually? Up to 650,0003, reported by none other than the World Health Organization (WHO).

Essentially, comparing the 2019-nCoV and SARS, even though the former spreads faster, it seems to be less deadly.

Source: https://www.businessinsider.sg/china-wuhan-coronavirus-compared-to-sars-2020-1/?r=US&IR=T

As shown in the table above, many other viruses caused a lot more damage and deaths compared to 2019-nCoV.

An ongoing flu virus has afflicted an estimated 15 million and The Centers for Disease Control and Prevention (CDC) estimated at least 8,000 deaths in US alone THIS season4. So this influenza that we’ve known about all this while does not generate much interest anymore, even though it kills up to 650,0003 globally every year.

So why aren’t we more concerned about influenza?

This is because of the power of the media. News has been sensationalised, and we ARE emotionally moved by the daily (or hourly) bombardment of news and updates about a new virus. Worse, some are fake news. The proliferation of social media nowadays also aids the spread of this news. Inadvertently, negative sentiments do hit the investment market.

However, even though the market did fall during the SARS epidemic, it did not stay down. In fact, many took the opportunity to buy into the market when it declined, and eventually, at the end of SARS, the market had turned higher compared to the beginning.

Thus, this current event may very well turn out to be an opportunity for us.

Even though the Wuhan coronavirus outbreak is worrying, and social media further adds to the stress and uncertainties regarding our investments, Unicorn views this event as a temporary one. So let us appreciate the power of the media, but not fall under its spell.

 

We believe investments are for the long-term, and your investments are currently 75% allocated into Capital Preservation, which is already defensively geared to counter negative sentiments of the market such as now. If we should sell now and not get back into the market in time, we may never buy it back at a cheaper price. Thus, rather than sell and buy it back later, we aim to capture buying opportunities with the 75% in Gold, Bonds and Cash should the correction be deep enough.

Do speak to your Unicorn consultant if you have further queries. We wish the best for everyone and our hearts are with the frontline medical staff who are battling the Wuhan coronavirus.

Be safe, everyone.

 

References:

1.South China Morning Post

2.Business Insider Singapore

3.World Health Organization (WHO)

4.National Public Radio (NPR)

 


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