Life in South Africa and the world after COVID-19

The COVID-19 pandemic has held the world to ransom, locked up in their homes seeking new and different ways to conduct their businesses – and their lives. The choice of continuing to work in a different way has, however, been a privilege mostly only the affluent have been able to entertain, as many South African’s have been jobless and without a lot of hope.

The Government have reacted swiftly and decisively to contain the virus and support those who will have suffered most from the pandemic. For that we can be grateful, but what will the country and the world look like post COVID-19?

Essentially there are three main scenarios that could play out…

Victory and recovery

Firstly we could find the vaccine (and recent reports are very positive in this respect) and begin a gradual, but definite financial recovery. This is the best case scenario and would mean that COVID-19 will soon become a thing of the past and we can get on with our lives.

Even in this case we are most likely in for a pretty long term recovery, the timeline of which will depend on the business we are in. Some companies will even have prospered in this period, some like the travel industry and events companies, as just 2 examples, will probably need to take a fairly long term recovery view.

Resurgence and longer recovery

Secondly we could begin to emerge from our cocoons in the belief that with improved numbers we need to get back to work, ignoring the fact that the virus is not yet beaten. As Ricardo Hausmann from the Harvard Kennedy School put it: “At the limit, people will have to decide between a 10% chance of dying from the virus and a 100% chance of starving to death”.
Then if the virus has a resurgence we’ll be right back to square one. This will obviously mean a much longer term recovery and astute businesses and investors will not be too easily coerced into a false sense of security. We all need to be prepared for this eventuality.

Defeat and little or no recovery

Thirdly – and the worst case scenario, is that COVID-19 will continue for a very long time, unchecked and undefeated with numbers simply continuing to grow. In this case Governments and commerce will be forced into providing support of such huge proportions that we could be facing a world economy that will never recover to where it was prior to the advent of the pandemic.

Gauging the ingenuity and determination of the human population however, this is unlikely. Realistically though, whichever scenario does play out, the damage to the economy has been significant and there will be an extensive period of recovery.

Hindsight is 20-20 vision

The real upside of COVID-19, if it can be said that there is one, is that we should have at least learned some valuable lessons as people, businesses and investors.

As people – we should now understand more than ever that certain things in life are simply bigger than us and beyond our control. There is a very real need to protect one’s self and one’s family from unexpected events like serious illness and the sudden disability to earn an income.

We do believe that when, as Financial Advisors, we advise our clients to include income protection, life insurance and disability cover in their finance plan, it is not just to sell policies, but really in their best interests.

As Businesses – we need to have learned that regardless of the nature of our businesses I.T advancements and social media mean we have created a different world and a different way to operate. We need to keep up with the times and, as this pandemic has shown us, have a decent income protection plan for the business too. A good Financial Advisor will also tell you that any business must start out with sufficient reserves to cover lean times.

Finally as Investors – we will have been clearly reminded that if our investment portfolios are in good hands, our collateral damage in such a time can be greatly minimised. Also, if you have the reserves to buy in ‘lean times’ you can make some hefty returns giving you a far more rapid recovery!

For over 25 years Hereford Group have, through our excellent, experienced and knowledgeable Financial Advisors, been helping many clients weather the kind of storm that COVID-19 has unleashed.

Contact us to be amongst those who will be facing a far better life after this pandemic, or at least to ensure that you will in the future be able to rise above the worst that life can throw at you. Stay positive, stay in touch and stay safe out there!

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