How to vaccinate your portfolio against coronavirus

The spread of coronavirus could pose a threat to your portfolio, says Merryn Somerset Webb. Make sure it's protected

Gold: boosted by the coronavirus

This week brought a slew of interesting statistics on inequality in the UK. It turns out that income inequality is slightly higher than we thought (albeit not rising – which is good). More interesting, however, were the numbers on longevity equality. The latest show (pleasingly) that while the rate of increase in UK life expectancy has slowed we are still living longer than ever. Female life expectancy is now 82.9 years and male 79.5 years. However, these numbers do mask some miserable divergences: there is close to a 20-year difference in the length of the lives of those who live in the poorest and the richest areas of the UK. This is a gap that is going to get wider. That’s not because the life expectancy of the poor is likely to fall, but because that of the very rich will rise faster. 

Anyone who came to our MoneyWeek conference late last year will have heard longevity expert Jim Mellon talking about the various expensive pills, devices and treatments he expects the rich to use to stay alive over the next few decades. Gradually they will pull further ahead of the rest of us. Many in the US currently believe they have a billionaire problem (too many people with too much money buying too much power. Not long now and they will have a billionaires-living-too-long problem as well. That’s something that will add a whole new dimension to the inequality argument. Politicians can’t promise to redistribute years lived quite as easily as they can promise to redistribute cash. Instead, when it comes to longevity the only equality option is to find a way to level up. That’s not easy – or cheap.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

Shielding your portfolio from Covid-19

Still, while we wait for governments to catch up on this, what of the portfolio you are building to support the long old age MoneyWeek readers are likely to have? Last week I suggested that, with the fast spread of the Covid-19 a rising risk, you start shifting some money into the oldest and best of safe havens. If you used that as a reason to top up your gold holdings, you’ll be pleased. Most stockmarkets have had a horrible week, but gold hit a seven-year high on Monday. Whether it spikes higher or not in the next few weeks will depend on how the virus moves from here and how governments react to it. The more schools close, the more group gatherings are cancelled and the more freedom of movement is curtailed, the higher gold will go. We aren’t virus specialists, nor do we have any particular insight into how global governments will manage the crisis (beyond knowing that it won’t be satisfactory), so we can’t make a perfect call on that. 

What we can do is suggest that you think of safety first when it comes to your investments (I’m taking it as a given, by the way, that you are doing the same with your health). If supply chains falter and global profits take a nasty hit – which they will – where might your money be safe (or at least in less danger) at the moment? In this week's magazine Max King gives his take on this (you can mitigate your equity risk with careful buying of bond funds); we explain why Japan, while not exactly holding up nicely in the face of crisis, is at least cheap; and John Stepek has some wise words on the market’s most obvious contrarian trade. The virus might just be marking the turning point to value we’ve been expecting for some time.



Investment strategy

The coronavirus is scary – but it's irrelevant to your investments

The spread of the coronavirus is causing alarm around the world. And, while it could be a serious short-term threat to human health, it’s not somethin…
24 Jan 2020

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019

There are lots of reasons to be bearish – but you should stick with the bulls

There are plenty of reasons to be gloomy about the stockmarkets. But the trend remains up, says Dominic Frisby. And you don’t want to bet against the …
17 Jul 2019

Good news on jobs scares US stockmarkets

June brought the best monthly US jobs growth of the year, but stockmarkets were not best pleased.
11 Jul 2019

Most Popular


What does the coronavirus crisis mean for UK house prices?

With the whole country in lockdown, the UK property market is closed for business. John Stepek looks at what that means for UK house prices, housebuil…
27 Mar 2020
UK Economy

The UK’s bailout of the self employed comes with a hidden catch

The chancellor’s £6.5bn bailout of the self employed is welcome. But it has hidden benefits for the taxman, says Merryn Somerset Webb.
27 Mar 2020

Gold is hard to find right now – so should you be buying?

With demand through the roof and the physical metal hard to find, it's not the best time to buy gold. But right now, says Dominic Frisby, you want to …
25 Mar 2020
Share tips

Share tips of the week

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
27 Mar 2020