The latest Ebola outbreak - implications for investors

The last few weeks have seen a range of factors causing volatility in investment markets including concerns that the Fed might start to raise interest rates earlier than expected, worries about the lack of strength in Europe, Russian trade sanctions and the conflicts in Ukraine, Iraq and the Middle East. In the background have also been concerns about the worsening Ebola outbreak in West Africa with the risk it could cause a global pandemic. This has been heightened after the World Health Organisation (WHO) declared the outbreak an “international public health emergency”.

While this is first and foremost a human crisis, understandably there is some concern this could turn into a global pandemic scare first affecting travel related stocks but then having a broader economic impact. That said, recent experiences with SARS, bird flu and swine flu highlight that worst case pandemic fears don’t always eventuate.

• The worst Ebola outbreak to date in Africa and fears it will spread is leading to some concerns of a global pandemic.

• So far there has been little impact on global share markets but if the number of cases continues to rise with more signs of transmission to western countries then nervousness could increase.

• While there is reason for concern, the experience with SARS, bird flu and swine flu highlight that worst case pandemic fears don’t usually come to pass. The key for investors is to be alert, but not alarmed.

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