Investing in the Stock Market – Market Turmoil

Investing in the Stock Market – Market Turmoil

Your success as an investor will largely be dependent on either having a reasonably knowledgeable investment coach OR if you plan to go it alone then you need to understand and differentiate between short term and longer Market Volatility and Volatility.

Investing a lump sum can be tricky but if you can master an understanding of market volatility then you can turn volatility to your advantage and to investment profit.

You may wish to take note of the following – 79 London listed companies posted profit warnings during the last three months, that’s an increase of 39% from the same quarter in the previous year. A profit warning is issued by a company to communicate to its investors that earnings will not meet previously estimated earnings. These 79 profit warnings represent the biggest percentage increase in profit warnings for four years.

Informed opinion is that this market turmoil is not simply down to concerns over the Chinese economy or even due to expectation of higher interest rates in the UK but primarily earnings estimates will be hit hardest by the impact of new technology which is disrupting traditional supply chains and providing customers with more convenience in their purchase experience. A classic example of this is the significant impact of Uber on the black cab trade.

On Friday:-

  • The FTSE 100 closed the day at 6,448.08, an increase of 67.80 points.
  • The FTSE 250 rose by 196.16 points to finish at 17,240.70.
  • The FTSE All Share grew by 37.28 points to 3,526.02.
  • The FTSE AIM All Share finished at 747.30, up by 2.61 points.

As we have repeatedly stated, take care in this investment market place, be more cautious than normal, adjust and modify your portfolios.

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The opinions expressed by Ray Best are meant to inform and educate. Before making any investment decisions always take advice that is pertinent to your investment personality and financial situation.

You are aware that past performance will not necessarily be repeated in the future, but you should be aware that persistent poor performance invariably will.

The value of an investment and the income from it could go down as well as up.

The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.

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