Making sense of fluctuations in the Financial Markets

Currently, in light of economic uncertainty surround ongoing efforts worldwide to contain the Coronavirus, it is no wonder financial markets are tracking down.

With a number of airlines cutting flights amid the reduction in bookings linked to the Coronavirus, the UK economy was looking in need of support, and it was in no way alone. The Bank of England announced on Wednesday 11th March, pre-budget, a cut in interest rates back to the low levels of 0.25% with the aim to foster growth in the economy and boost jobs. This resulted in European Stoxx 600 rising slightly by an average of 1.8% and FTSE 100 by 1.7% (as reported in the FT 11th March 2020).

Your funds in moving markets

It is often hard to understand how to view market uncertainty during rare economic times. At Henson Crisp we have the following points to consider when it comes to your investments.

Markets fluctuate

It is important to remember that markets naturally move up and down, it is mainly reported in the media at extreme ends of the spectrum. It tends to be during times of uncertainty, whether that be economic, political or health related that the trend tracks downward, our clients invest for the medium to long term day to day volatility has always and will always happen.

Time to invest

In a downward trajectory there can be significant gains driven by the ability to buy investments at significantly lower levels in readiness for the upward movement. Developing your portfolio when markets are low offers an opportunity for the future.

Your views of risk

When you began your investments, whether for your pension or overall wealth portfolio, you will have been asked detailed questions about your attitude to risk by your financial adviser. We recommend regularly reviewing your attitude to risk. Most financial advisers offer periodical reviews, normally annually. It is always worth taking time to reconsider your attitude to risk on your portfolio with your independent financial adviser, to ensure your expectations and views on risk remain the same. Your views can alter over time, particularly as you near retirement or a moment where you may have a fund close to maturing.

Take advice

If you are uncertain about what steps you should take, or in fact that you would like to consider re-investing, take the time to make contact and get the advice you need.

Long term views on investments

If you are unsure, spreading your investments out among different organisations, industries and sectors, areas of the world and asset classes, for example stocks and bonds, you can help limit the impact of downturns in a particular market on your overall portfolio.