Looking to the future?
Navigate through troubled times
Without doubt 2008 was one of the most challenging years in recent history in terms of stock market performance, volatility and uncertainty. In these times it’s only natural to be concerned about how this affects the value of your investments.
Clients often ask what action they should take in response. By remaining in close contact, we can help clients avoid unnecessarily crystallizing loses. There are several steps you can take to navigate through these troubled times and hopefully come out the other side with your investments intact.
It can be tempting during times of stock market uncertainty to delay making new investments or even consider selling existing investments and try investing again when values are lower – this strategy is known as “market timing”. However, according to investment company Fidelity* missing the best days can have a significant impact upon investment returns. Over the period 1993 -2008 missing the best 10 days has reduced annualized returns from US & UK stocks by around 1/3 rd.
Through regular investing, usually monthly it is possible to make volatility work for you; if the market does fall you know that your next monthly investment will benefit from the higher number of shares you will be purchasing at the lower price. In a rising market this will result in less shares being purchased, but then your existing shares should be showing a profit.
There are a series of other approaches available to clients to help minimise the effects of the current bear market, whilst maintaining your long term investment goals. The key is not to panic.
So, if you haven’t already done please contact us on 01639 893219 for expert help and to arrange a full financial review at our offices in Port Talbot. Similarly, if you know of a relative, friend or neighbour who might benefit from professional help we would be happy to offer our services to them.
- source Fidelity and Datastream 01 June 1998 to 02 June 2008
Please note that past performance is not a guide to what might happen in future, and you should be aware that the value of an investment can fall as well as rise.
This article was written by Rock Financial Consultancy
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