Investing in Volatile Times
Investing in volatile times
After the last 20 years of economic highs and lows, it is fair to say we may be getting used to living in volatile times. The last two years have been no different. It can be difficult to feel confident in your investments when things aren’t going your way but there are simple rules to follow to ensure you stay on the right path.
When is the best time to invest?
Have you heard the saying, ‘time in the market, not timing the market’? There is no sure fire way to predict the best time to invest, what is important though is investing as early as possible and not being put off when markets are at a low point. In fact, stocks may be cheaper to buy at this time!
The magic of compounding (growing an investment by reinvesting any returns) can help to generate wealth. The difference of just a few years can have a massive impact on the end result so the first rule is to start early if you can.
How long should I invest for?
As above, no one knows with certainty when markets will rise and fall so trying to time the market is seldom successful. The sooner you can start investing, and the longer you can invest for, the more likely it is that you will achieve your financial goals – regardless of any short-term blips.
During periods of volatility, particularly if you notice the value of your investments has fallen, it can be tempting to exit the market or make drastic changes to your portfolio. Your money needs to be in the right place to recover in value and make a profit if markets go up, so it’s important not to sell and investment as a knee-jerk reaction if it’s value goes down temporarily.
Take your time, stick to the plan and avoid making hasty decisions.
What should I invest in?
A diversified portfolio can help to iron out the ups and downs of stock markets and also, vitally helps to avoid exposing your portfolio to undue risk. You should always hold some funds in cash in case of emergency, but other investments offer better growth potential. When one asset class is performing poorly others may be flourishing, and vice versa. For this reason, you should avoid concentrating your investments in just one area.
We are here to help
Every year we conduct whole of market, independent research to ensure that our clients benefit from providers that can demonstrate:
• Good Financial Strength
• Strong performance whilst taking on an appropriate level of risk
• Wide range of risk profiles to suit client requirements
• Range of investment solutions to meet objectives
• Good levels of service
Our research gives us confidence in the advice we provide to you to ensure your investments are diversified and we are here to guide you through the good and the bad. If you ever have any queries about market volatility or ever need our help, we are always here.
If you feel you could benefit from having a relaxed chat with one of our specialist advisers about your later life financial needs, we would be so pleased to offer a complimentary financial planning review.
Call 0117 363 212 or email office@haroldstephens.co.uk to book your review.
The contents of this article are for information purposes only and do not constitute individual advice. The value of an investment and the income from it may go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.