An important part of our ongoing relationship with you is to be here to provide reassurance and increase your confidence in your financial arrangements when others seem intent to spread panic.
As you know, Life Matter’s belief is always to take the long-term view and where possible ignore the short-term noise that’s currently surrounding us. But we also want to share a few thoughts, most are simply a reminder of things we have discussed in the past.
The world is watching with concern about the spread of Covid-19. The uncertainty is being felt around the globe, and it is unsettling on a human level as well as the impact seen in the markets. As we have come to expect, the media is attempting to whip everyone up into a frenzy because that is what sells papers and increases viewing figures. On top of that, there’s the drop in oil prices we have seen this week.
Over the long term, the markets advance. You can see this clearly in the above chart which shows the long-term trend of the MSCI World Index since 1970, withstanding a number of world epidemics. It is normal to have periods of temporary decline, and once every few years a deep temporary decline, which is what we’re now experiencing. Whilst such deep drops in the market are worrying, history tells us that when you’re invested in a widely diversified global portfolio, these declines are temporary. The markets are simply testing your resolve, as a successful investor.
The good news is that there’s no need to react to the drama that is playing out in the markets because your portfolio is fit for purpose through all market cycles. Feeling fearful is part of being human and a normal reaction to market extremes. It’s taking action based on this fear that will cause you long term financial harm. We’re here to ensure that doesn’t happen.
Be assured that my life savings are invested in the highest risk portfolio we use, so I have experienced every bit of the latest market movement.
Every time we have seen a market downturn, we are led to believe it’s worse than the previous one, that this time it’s different and that it may never recover. This is simply not true. The financial media love a great news story and they aren’t concerned about the impact their reporting has on investors. We’ve been here before, and no doubt we’ll be back here again in the future.
As your Financial Planners, we are here to ensure that Your Big PictureTM stays on track; delivers all of your life goals and supports you through life’s transitions. Amid the anxiety surrounding the coronavirus, this must remain our focus. Decades of financial science and long-term investing principles still hold strong and will see us through this storm. Just like they have through every other.
As always, please feel free to call or email us with any concerns you may have, or just for a few words of encouragement.