The last seven to ten months have been a difficult and testing time for investors, probably more so if you have been reading my doom laden warnings in my blog over this time period.
A reduction in demand from the Chinese economy has led to a sharp decline in world markets. Falling oil prices are often also cited as another cause of panic and worry to investors.
You may have been left reeling by the extent of the stock market decline, do remember please that the odd stock market crisis is a “normal” and regular event. There have been a number over past years.
If you have felt like abandoning your investments and putting everything into cash that might not be the right course of action, particularly right now.
To experience the highs and lows of stock markets is all part and parcel of investing. Although anyone who invested in the FTSE 100 Tracker can’t be too happy right now.
We strongly advised our clients to modify their portfolios and our current portfolio for medium investors is holding up nicely.
So make sure that you review your investments on a regular basis, but do not make the mistake that almost ALL investors make and hang onto the funds that have lost money and sell the funds that have made money.
If the market senses any weakness in a company – it will mark its shares down sharply. The weakness may only be temporary but the market will move against the share anyway. So prices of the share will drop and the fall in the weaker shares will spread to the rest of the market. This provides opportunities for professional investors to step in if the reduction in price has been overdone, or buy good companies for less.
So the current market malaise can be opportune, providing you select fund managers with proven ability and good stock picking, do throw some more cautious funds in the mix!
