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  • Writer's pictureStephen Walters

Further to go?


Here’s the Dexterity portfolio (red) yesterday, at the close of UK’s stock exchange; compared to MSCI World (grey) and FTSE All Share (black).  Today markets have fallen further because they’re adjusting to Mr Trump’s admission "this virus is vicious”. 

Is there further to go? At a webinar this morning, Vanguard’s Chief Investment Officer showed these two charts, which compare the present downturn with the Global Financial Crisis (GFC) of 2008.  

  • In the left-hand chart, we see MSCI World index’ performance. To me the congruence of steep falls indicate only the reflex-response of markets to bad news. More interesting to me is the suggestion that markets could easily slide further, and take a lot longer to recover than they took to fall.

  • The right-hand chart compares the falls in UK GDP over the two periods. Compared to what now looks like a GFC graze, Covid-19’s impact is a slash. If lockdown extends beyond mid-May, economic recovery won’t be swift, I reckon.


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