COVID-19 and your finances according to a local financial adviser
Financial adviser, Neil Anderson warns against overspending and says stability will return.
POLOKWANE – Neil Anderson from Anderson and Associates, a financial adviser in Polokwane, thinks that people overact with regards to the COVID-19 virus.
Review asked him what he thinks the effect of the measures announced to curb the spread of COVID-19 would be on small businesses.
He said people overreact and this causes a ripple effect. The financial markets are busy falling, people are stocking-up on groceries, schools closed and people have nowhere for their children to stay as schools and care centres have closed, so they take leave, causing productivity to fall and all these things make people even more suspicious and afraid.
“Look at all major calamities such as the Cuban missile crisis and the previous corona and swine flu outbreaks. After 90 to 100 days, everything was back to normal again.”
Anderson warns against overspending and says stability will return. Small businesses, he said, might feel the pinch on the shorter term, as people may be less productive or pretend to be ill, or stay away because of some symptoms they might think is COVID-19. Some may also encounter problems with staff having no-one to look after their children.
He said businesses might sell a bit more products now and restaurants will be less busy, but it will impact and have a domino effect. “If restaurants order less bread because they have less costumers, bakeries will sell less bread and maybe have to retrench staff. People who used to work overtime may now find themselves without that extra income, and this affects the family’s lifestyle, or he/she cannot afford his house’s high rental anymore and opts for something cheaper. The landlord then has a diminished income but all this is just temporary, not permanent.”
People stocking-up on some groceries may find themselves with excess stock of toilet paper and tinned foodstuffs and will maybe not feel the need to buy again soon which causes business to slow down at some time in the future.
He said his real concern is if a rapid increase in the spread of the virus may collapse the health infrastructure should lots of people become ill at once.
“The rapid increase must be contained,” he said, but maintained that the virus will work itself out and the economy will recover. “The next couple of months will see a serious effect on the economy, but on the other hand, it is a good time to invest and get into the market as it will recover.”
