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Navigating the COVID crisis

The Rules of Investing

Livewire Markets

One of the biggest questions on many investors’ minds in recent weeks has been, just how bad will the economic contraction be? But Chris Rands, Portfolio Manager for the Nikko Australian Bond Fund, says this isn’t the question to focus on. Instead, the focus should be on how long the downturn will last.

“It’s going to be weak. We all know it’s going to be weak. You take a quick walk around outside and you’ll see that absolutely nothing is open. If it’s down 5, 10, 15 percent, nothing would really shock me. It’s more important to say, “how long is it going to last?””

In this episode of The Rules of Investing podcast, Chris speaks to us about the stability of Australia’s financial institutions, when he first realised that COVID-19 presented a material risk to markets, and how the crisis has affected his view on Australian housing.

Time stamps

  • 2:33 - The realisation that COVID-19 would be bigger than expected
  • 4:41 - Chris’ take on the Russian play at oil prices
  • 6:10 - What level of contraction should we expect this quarter?
  • 8:41 - Base case for a recovery - V, U or L shape?
  • 12:54 - How Chris’ view on housing has changed 
  • 17:00 - Are banks as well capitalised as we think? And can they withstand a recession?
  • 20:23 - How are Australian credit markets holding up?
  • 24:23 - Are bonds still attractive at current prices?
  • 28:48 - Where Chris is putting money to work at the moment
  • 30:06 - Areas to be underweight
  • 31:23 - Chris answers our 3 favourite questions

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This article is for informational purposes only and should not be considered financial advice. The article may contain the views or opinions of third party contributors to Livewire Markets. These contributors have not considered your objectives, financial situation, or needs. The information in this article should not be relied upon as a substitute for personal financial advice. Livewire Markets recommends that you seek independent advice before you apply for any financial product or service. Livewire Markets is exempt from requiring an AFSL under ASIC Regulatory Guide 36, section 66.

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The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over...

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