Investment Focus

Investing in volatile markets – Stay focused on your long-term strategy instead of short-term news.

Global stock markets are experencing volatile market conditions and for investors this can be difficult to ignore when the media highlights market falls, but seldum reports on steady and prolonged periods of market gains for investors.

When we look back on past stock market events, October 19, 1987 stands out and is worth considering when we talk about current events.  Referred to as Black Monday, the S&P 500 experienced a fall of 20.5%. This is still the worst day for the stock market on record. While days like Black Monday have occurred throughout history, they are rare and unpredictable. In fact, because Black Monday was a result of trading behavior and not market or economic fundamentals, the S&P 500 still finished the year with a slight gain.

The volatile investment returns that are experienced on a daily basis are smoothed over, during monthly and annual periods. By holding an investment over a longer number of years has historically improved the risk/return profile of an investor’s portfolio.

Volatile markets can also create opportunities for making new investments that you are looking to hold as a longer term investment. This can include Equity ISAs and Pension investments. Please contact us if you would like to discuss your existing long term investments or potential investment opportunities in more detail.

UPDATE  – Global investment markets rise on improving data

Important information

Please be aware that this material is for information purposes only. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are, unless otherwise stated, Johnson Gibbs’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. Johnson Gibbs accepts no legal responsibility or liability for any matter or opinion expressed in this material.

The value of investments and the income from them can fall as well as rise and investors may not get back the full amount invested. Past performance is not a guide to the future.

 

Posted in Investment Focus, News