In moments like these you will want to know that everything is going to be alright. As your advisors we want to reassure you. To counter the increasingly hysterical news reporting, here are three thoughts:
#1 Don’t panic. We have been here before, in fact we have experienced many market fluctuations in the last 20 years as the chart below shows. It’s no different this time.
#2 Don’t react. We build your portfolios to withstand market fluctuations. The defensive assets you own are protecting your portfolio value as the chart from the last 5 days shows. Changing strategy mid-event, simply crystallises any concerns and leaves you less well placed for the future. On that note, please remember that the growth assets in your portfolio are highly diversified, invested in more than 10,000 companies, across 46 countries and in countless industries. This gives you a very significant advantage to all those other investors holding concentrated risks… a point we will see when these market reactions calm down.
#3 Focus on the long term. The reason we all invest is because we want to capture the capital market return, if we didn’t we would all be sitting with money on deposit. The fact is, investors get paid a higher return than the risk-free rate, because markets go down as well as up. This is just one of those occasions and another reason why having a trusted advisor makes a lot of sense.
In conclusion, as Jack Bogle the legendary investor said “this too shall pass”.
Of course, if you have concerns, all of us at Citywide Financial Partners are here for you.
Risk warning: Investments involve risks. The investment return and principal value of an investment may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original value. Past performance is not a guarantee of future results. There is no guarantee strategies will be successful.