Wokingham Today

MARKET MELTDOWN PUTS INVESTORS ON EDGE

- With RAY L BEST

The recent stock market volatility has some investors running for cover. Your stance will depend on what type of investor you are: OH NO - I need to sell my investment­s now to minimise my losses … GO GO - An opportunit­y to buy more at these lower valuations. DODO - Crash, what crash! It’s human nature to invest into rising stock markets and want to sell when markets are falling. Most investors would rather have a portfolio that makes small gains, rather than be subject to market volatility. Past statistics bear this out as unit trust sales are at their peak when stock markets are high, and sales are at their lowest when the stock market is in decline. It’s fear of loss that drives investor behaviour and explains why a highly intelligen­t client of mine once refused to invest more into the stock market (despite it offering exceptiona­l value) until the stock market index increased by 30%; only then was he happy to invest. Psychologi­cally when stock markets tank, investors believe that the market will keep falling until they lose all their money. Our emotions prevent us making rational decisions, so we try to “rationalis­e” our poor decisions. Why is it worth emphasisin­g this message right now? We are nearing the end of the longest bull market in history and that means there will be increased stock market volatility over the next eighteen months. It doesn’t help that Mr Trump and the Chinese are having an increasing­ly noisy

and damaging trade war and the uncertaint­y surroundin­g Brexit doesn’t help either. Some people prefer to look after their own investment­s, if it all goes wrong - they only have themselves to blame. Others rely on a financial advisor. If you have an Independen­t Financial Adviser (IFA), then he should select the most suitable funds for you. Since 80% of collective funds have very poor performanc­e, the opportunit­y to select funds from the worldwide universe of funds is clearly advantageo­us. Be cautious of “advisers” that offer a restricted range of funds or only the funds of one company; the lack of choice will invariably lead to poor investment performanc­e and that’s before their higher charges reduce performanc­e even further. In recent years there have been massive leaps in technology, providing top tier financial advisers with software that demonstrat­es the clear difference in performanc­e between funds. It not only demonstrat­es how your funds have performed over time. It will indicate which investment fund managers have the most influence on fund performanc­e and help you compare any investment with an alternativ­e. Don’t leave your future to chance – you can now dynamicall­y improve your investment­s using this very sophistica­ted investment programme. There’s a catch – normally it would cost you a pretty penny to get a report like this, but we are a friendly lot, so we are happy to provide the first 10 investors to contact us – with a free report – DODO’s need not apply!

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