Corona Update – 21 April 2020
In our previous corona update, we outlined some future scenarios. In this update, we address the ongoing recovery from the most likely scenarios:
- A temporary recession with a gradual recovery of the markets with limited inflation (75% probability), or the crash of 1987;
- A further deflation trap with more stimulation (15% probability), or the 2008 financial crisis.
Below we present the actual realized recovery compared to our previous forecasts, with we are now about 3% ahead of the recovery.
The risk mitigation measures we have taken have enabled us to significantly limit the drawdown, especially compared to a Buy & Hold strategy. As a result, our recovery period will also be considerably shorter. If we look at the beginning of 2019, we see that we are already 5% above this level and with 29% return we are again close to our long-term target of interest + 5%.
Our models never sleep so you can, we are here to serve and protect.