Try Not To Worry!...

Are you feeling a bit unsettled at the moment?  We seem to have found ourselves, almost out of nowhere, in very scary times.
 
You’re probably aware that markets across the world haven’t taken too kindly to the growing threat of the Coronavirus.  Recent days have seen sharp falls and many markets are down 10% (or more) from their recent highs.
 
It’s worrying, from a health perspective but also worrying in terms of your money.  I completely understand if you’re feeling a bit unsettled so I thought this little message might be helpful.  As an investor, it’s OK to feel unsettled.

We hear the ‘experts’ talk about a market ‘correction’.  Actually, I dislike that term, why don’t they say it as it is… markets have taken a bit of a pounding!  Whatever term you use, though, it’s a nervy time out there in the world. You might be asking yourself these questions (and probably more):

• “Is the Coronavirus going to lead to a global recession?”

• “How’s this going to impact on my money?”

• “Will I ever get back the money I’ve lost recently?”

• “What should I do with my invested money if things get worse?”

• “Should I be selling my investments and hiding the money under my bed?”

I wish I had answers to these questions.  I wish I knew what was going to happen.  I wish I could tell you that you don’t need to worry and this is just a blip.  Unfortunately, I can’t.  All I can do is point out the sensible things an investor can do to combat such unforeseen events.

• Ensure your money is spread as far and wide as possible so there’s some protection against particular markets going south more than others.

• Own different kinds of assets, not just stocks and shares because different types of assets behave differently under different circumstances.

• Make sure you’re exposed the ‘right’ level of risk.Holding ‘boring’ assets doesn’t ‘excite’ but it does ‘protect’ when things go wrong.

• Have a good level available in cash at the bank so you have short-term to mid-term money available if you need it.

• Accept that markets do go up and down and we’re probably overdue a downturn anyway.The last one was the credit crunch in 2009.Remember that?!

• Remember that your in the investing game for the long-hall.Markets can react negatively, often dramatically, to events in the world but they also recover quickly.

“Isn’t this what you always tell me, Marco?”.  Yes, I’m afraid it is.  Investing is a process, not speculation.  You’re investing your money for it to grow in the long-term.  Unfortunately, the price you pay for that growth is ups and downs in the short-term.
 
As a global society, I know we’re going to sort out the Coronavirus.  I know markets will recover.  I know things will be OK.  Maybe I’m naively optimistic but, to be fair, I also know how investing works and that we shouldn’t be surprised by anything that happens.  Short-term events tend not to impact on the long-term trends.

We’re all human beings.  Despite everything I’ve just said about the process of investing, I’m not expecting you to be fine with what’s happening out there.  Please do call us if you want to talk about things.  We really do care about how you’re feeling…

I hope this was of some help to you.

Best wishes

Marco