The Malta Independent 25 October 2020, Sunday

Indepth: Maltese investors have learnt not to panic at first sign of a crisis – financial advisor

INDEPTH online Saturday, 16 May 2020, 09:14 Last update: about 6 months ago

Maltese investors have learnt from past situations and do not panic at the first sign of a crisis, financial advisor Jesmond Mizzi said on this week's edition of Indepth.

Mizzi also told The Malta Independent Deputy Editor-in-Chief Neil Camilleri that times like these could actually present opportunities for investors, although decisions should be taken wisely.

The investment sector in the context of Covid-19 was discussed during the interview.

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Mizzi said the investment markets took a hit towards February and March but started recovering the following month. Uncertainty and a level of volatility will remain, however.

He said many factors can affect the markets. Fears that the easing of restrictive measures could lead to a second wave led to a dip, but the realisation that Covid-19 deaths were lower than originally expected had the opposite effect.

News of a vaccine would undoubtedly have a very positive effect on the markets, Mizzi said, and the US Presidential election towards the end of this year would also be a determining factor.

There will always be movement in the markets, and investors should remain cautious and consider their primary objective - most people do not invest today to make a profit tomorrow but invest on a long-term basis.

While some investors could choose to sell off their shares and bonds during such a time, others might see an opportunity to buy shares at lower prices. This could be beneficial in the long term, when we return to normality.

"Usually, when people are selling it means that others are buying. People make money when others are selling. So, this could be a situation where one should be courageous. In view of the ongoing volatility, however, one needs to be wise."

He said investors should look at their personal situation and where their money is invested and be cautious while also not being afraid of taking an opportunity with some of their money. He said, however, that people cannot expect to reverse any recently incurred losses overnight. 

Asked how this crisis compares to the 2008 financial crisis, Mizzi said these are different circumstances because Covid-19 is affecting all sectors of the economy, not just the banks.

"We have entire sectors where people are not going to work, so the impact is much larger. This is why the measures taken by governments and central banks are much wider."

Asked about the measures taken locally by the government and the Central Bank of Malta, Mizzi said these have two main aims: to safeguard jobs and to give guarantees on borrowing. While it is still early to say whether more measures will be needed in future, Mizzi said he thinks this will be the case.   

 

 

 

 


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