Investing for the long term
When markets fall significantly, it can be difficult to see beyond the current uncertainty and worrying news headlines. Undoubtedly, we are living through a difficult time, the human impact of which is incredibly sad. We do not know how long the current situation will last, but it is sensible to remain focused on the longer term and have confidence that markets will, in time, recover from their current temporary falls.
Given our continued belief that there will be successful companies that continue to have strong cash flows and profits in the medium to long term, we would caution against selling assets when they are valued a lot lower than they were, say, at the start of 2020.
While we cannot predict when markets will recover, investors who do sell now could miss out on any potential upswing that would offset the falls seen in the past few weeks. There are numerous comparisons for the impact that missing out on significant upswings in markets can have on portfolios, and as we cannot be sure as to when these will happen, it is sensible to remain invested.
Clients at or near drawing on their portfolios are likely to require a more nuanced approach and should benefit from personal financial planning, but for most people, we encourage you to look beyond the short term uncertainty and instead focus on the many years and even decades that your portfolio is likely to be invested for.
If you would like to discuss the above, or your financial planning needs more generally, please do get in contact your usual Adviser or Simon Evans, firstname.lastname@example.org..uk.