Thanks Boris. Yes, we’ve been here before. But last time it was a completely new experience for us all. And we had light evenings and sunny weather to take the edge off.
Today, it’s grey, dark, rainy. The good old British weather is reflecting the mood of the country…
It’s natural to feel anger, frustration, anxiety. But better to focus on what we can control – and what matters.
It’s your choice of course, but I limit the time I spend on media reports, comments and opinion. There are way too many ‘experts’ who aren’t really experts. Just people who like to voice their opinions. Whether it’s on lockdown, the pandemic or what’s happening in the markets…
Remember: day to day stock market movements really are just noise.
It’s easy to think of the stock market as this massive thing that dictates prices. But the fact is that it’s made up of millions of individuals all trying to make money by buying and selling.
The prices reflect their best guesses of what the future will look like, given the current information available.
And the markets move when new information comes along and specifically how that new information relates to what the markets expected to happen.
As we witnessed with rising prices during the summer, it’s not as simple as going up because something good happened, or down because something bad happened.
Instead, the market goes up or down because something better or worse than expected happened. Bad news doesn’t necessarily mean the markets will go down on bad news – if the news was less bad than the market expected.
So, what does this mean for investments?
Well it means you can’t time the market. In the short term it’s hard to know whether it’ll go up or down on a certain day or week or month. We can make some reasonable assumptions about what’s happening in the short run. But nobody knows for sure.
In other words, ignore the short term noise and focus on the long term returns the markets offer via your diversified portfolio.
I’m not pretending the next few weeks, months even are going to be easy.
But remember, together we have designed and implemented your individual investment strategy to suit you, both financially and emotionally.
We have confidence in that and I hope you do too.
Know that you can talk to us at any time about anything that is worrying you, or on your mind.
That’s what we’re here for.
Photo by Glenn Carstens-Peters