Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#1
We have seen a lot of very lurid headlines about £billions being wiped off the stockmarket, of panic in the City and, make no mistake, there will be a lot more of these headlines to come.
Whatever you do do not, under any circumstances, make any rash decisions with any investments that you have. You will risk locking in any losses.
The people who lose out, lose the wider perspective and panic.
Right now the City boys and gals are reacting to events, events that will pass. For them day to day price movements are important. For the normal consumer the longer term is more important, not day to day, or week to week, prices.
One little story from a previous market panic goes back to just before the start of Gulf War 2. As a result of seeing her investments tumble a lady encashed her Stocks and Shares ISA and switched her pension to cash. It was the bottom of the market. She came to me two years later for advice as she was approaching retirement. I estimated that the pension she had, worth about £30,000, would have been worth by then well over £50,000 if she had not switched to cash when she did. It would have been a similar story with her ISAs. Do not let that kind of thing happen to you. If you are within a year or two or retirement or the point you need the money then get advice.
Whatever you do just stay calm. If you are worried or have specific concerns about your investments or timescales then you need to speak to an appropriate adviser, preferably one who you pay and does not depend on generating commission. The difference is not only one of how they are paid there are also issues of experience and qualifications, because of the nature of fees the adviser who requires a fee to be paid is more likely to be worth that fee...
Of course you could just come to me... but it is not my intention with this to tout for business, just offer a bit of reassurance and generic advice at a difficult time.
For those who are brave, this is a buying opportunity - but for that you really must get good fee based advice.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
#2
panic sets in very quickly, someone who worked in the money markets about 20 years ago told me that it is all down to cool heads. much as barry is saying.
#3
BarryW, despite (or even, pauses for thought, because of.......) differences of political opinions, you are always a knowledgeable and thoughtful professional with welcome advice.
Guest 656- Registered: 13 Mar 2008
- Posts: 2,262
#4
Thats very good advice there Barry, thank you. It must be very difficult to keep one's cool in the light of recent happenings, so your words of wisdom will I'm sure help those who need reassurance.
Ross Miller
- Location: London Road, Dover
- Registered: 17 Sep 2008
- Posts: 3,709
#5
As Barry says much of these movements are due to the way that investment banks manage their proprietary holdings and to a lesser extent some of their client money - most of these funds are what is known in trade (by the way I work for one the leading investment management houses in the City) as short only funds. These types of funds are looking to make money on the short term differences/movements in pricing (often using computer models and tools to take advantage of tiny price movements in milliseconds). The firm I work for manages lots of savings and pension funds and we are a traditional "long only" house - where our fund managers are looking for long term growth prospects to generate real returns for you on your pensions. As an aside we were one of the only houses in the City to loose nothing from both the collapse of Lehman Brothers or the from the mortgage backed securities debacle.
So to echo Barry's advice hold your nerve and hold onto your investments, after all all these things go in cycles and over the long term stocks and shares have shown higher than inflation levels of appreciation.
"Dream as if you'll live forever. Live as if you'll die today." - James Dean
"Being deeply loved by someone gives you strength,
While loving someone deeply gives you courage" - Laozi