It’s natural to feel worried and anxious when we see the Stock Market drop in value.
‘Keep calm and carry on’ can feel difficult when we witness record drops in share values, currency rate fluctuations, and increasing prices of goods.
At the moment, the market fluctuations are like playing a game of snakes and ladders!
Crucial to remember
It’s crucial to remember that stock market investing, whether through ISAs, Bonds, or Pensions, is generally a long-term investment strategy.
Periods of market volatility and significant global events are inherent and will inevitably influence market conditions, sometimes with more severity than others.
Investing Rule N.o 1
Investing should not be approached as a short-term endeavor unless you possess considerable experience or work with a specialist who can assist with tactical market entry and exit.
Adopting a medium-to-long-term investment horizon allows you to weather market fluctuations. By regularly reviewing your attitude to risk and investment strategies, you maintain a calmer perspective, even if recovery times vary.
Modern investment fund structures often allow for continued investment even as you approach specific life stages like retirement. Funds can remain invested and accessed as needed rather than being entirely liquidated at a potentially unfavorable time.
Read Saving & investment strategies for when times are tough
What if you are investing monthly?.
The benefit of regular investing (e.g monthly contributions) becomes particularly evident during market downturns.
Your consistent investments, which purchase shares or units at lower prices, position you to benefit from increased value when the market recovers.
Time in the Stock Market
There’s a well-known saying: “time in the market beats timing the market.” Attempting to predict the “right” moment to enter or exit the market can be just as costly as being out of the market during a recovery.
I firmly believe that a market recovery and stability is inevitable, and being invested at that time will be advantageous in recouping any temporary losses.
Should I hold Cash
Of course, holding an appropriate amount of Cash in a secure, FSCS-protected environment is vital.
Read how the Prudential Regulation Authority is proposing to increase the FSCS limits.
Maintaining the right balance between Cash and investments based on your individual circumstances is equally important.
If you feel a review or update of your financial situation is necessary, please do not hesitate to contact us.
We are always here to provide support and discuss your needs further.
