Back in December I wrote a blog regarding my Top 10 Investment tips. A blog designed to give you a guide to investing in the stock market and, more importantly, some practical advice on how to swerve some of the more avoidable traps that can lay in wait.
My Top 10 were:
• Embrace Market Pricing – it knows the worth of a stock
• Trying to outguess the market isn’t a sensible strategy
• Past performance is no indicator of future positions
• Play the long game and let the markets do the work
• Have a look at the woods as a whole, not just the trees
• Fish in the wider oceans
• Try to avoid bandwagons
• Keep your emotions out of your investments
• Don’t believe all that you read in the papers
• Stick to your plan – focus on staying on course
The full blog can be found here:
However, with the ongoing volatility and distractions in and around the markets, I thought that I might just reiterate one or two important points regarding holding your nerve.
2B or not 2B?
I’m sure that when Shakespeare wrote that he didn’t have Bitcoin or Brexit on his mind. However these two modern days B’s seem to be claiming most of the financial headlines at the moment. On one hand Bitcoin seems to be the answer to everyone’s prays. Presented as a get-incredibly-rich-quick scheme that seems like a no-brainer, but you have to ask who’s really making the money now. The simple answer may lay at the feet of those brokers who are trying to drive investment in the commission-rich bubble that is Crypto Currencies. Yes, the history of Bitcoin growth is phenomenal, but as I said previously ‘Past performance is no indicator of future positions’ and you should always ‘Try to avoid bandwagons’. Couple that with the fact that Bitcoin lives in the dark web (the domain of criminals and terrorist) and you have to also ask would you trust any investment made where organized crime lurks in the shadows?
Brexit is another big distraction for the markets. Ask yourself if anyone really knows what’s going to happen after Brexit. I’d argue that, given the fact that no one yet knows what the terms of Brexit will be, it’s impossible to know what impact Brexit will have on the markets.
We all know that fear helps sell newspapers, which is why the newspapers love stirring-up doubt and fear over the negotiations with the EU and what that will mean to all our futures. Again I remind you of one of my Top 10 Tips “Don’t believe all that you read in the papers”.
Plain sailing or stormy waters?
Ultimately how bullish you are is a matter for you. But I would advise that changing a winning strategy just because the markets are a little volatile is unwise. Even the most bullish captain would find it hard to justify steering towards a storm, just to see if there is some opportunity to catch some strong winds in the sails. It’s not an option for traversing the seas and certainly it shouldn’t be an option for navigating the markets either.
In turbulent times, we batten down the hatches and ride out the storm. It’s exactly the same for the markets, you sit tight and wait for the markets to settle. Again, as I said in my Top 10 Tips “Play the long game and let the markets do the work”.
Keep calm and carry on
Back in December I finished my Top 10 Tips with this piece of advice: “Stick to your plan – focus on staying on course”. Nothing has changed. You should always focus on what you can control and what your long-term investment strategy is. Stick to what you’re doing and avoid reacting to movements in the market, no matter what Joe Public is saying.
If you’re looking for advice, then get it from someone who knows. Speak to your adviser about elements of your investment strategy that might concern you, or ask them about the ‘golden opportunities’ being presented to you. Either way they will be able to share some emotion-free expert insight, based upon long-term investment strategy and researched market knowledge.
Always remember – there’s no such thing as a silly question
When it comes to your finances, if you want to know more, please ask. Your adviser is there to help guide you to the many opportunities that present themselves and to steer you away from the pitfalls. If there is anything you’re not sure of, or you wish to discuss an opportunity that you believe the markets present, then speak to a qualified adviser. If you don’t currently have one of your own, then please don’t hesitate to contact Bridgewater Financial Services, as we will be only too pleased to help.