Over recent weeks a feeling of doom and panic has been evidenced throughout the globe.
Queues in supermarkets, empty shelves and a run on ‘essential items’ have all lead to a feeling of doom.
Similarly, investment markets have suffered volatility not seen since the global financial crisis of 2008. As with that period, it is the uncertainty of where things are heading that causes the panic selling of stocks and shares, which ultimately lead to a spiral of concern and worsens the position.
What history has shown us is that such periods are usually very short lived. Of course, we are in a slightly different position where the only similar reference point is the SARS epidemic of the early 2000’s. On that occasion the markets had fully recovered in a matter of months.
When looking at our own investments and pensions it is important not to panic. These types of investments are for the longer term and can take the up and down of the markets over times. What is important is to stick with your strategy. If you cash it in when values are down, you have lost money. Staying invested gives you the best chance of recovering values and moving forward. Trying to second guess the market will undoubtably lead to a drop-in longer-term value. When do you know when to go to cash and when to go back in. Going back in at the wrong time could lead to further drops and worsen the position.
Additionally, a well spread of investments gives you a better chance. When you see the FTSE has dropped by record numbers it does not necessarily mean that your own fund has dropped by as much as it is likely invested in other areas and assets.
So, as it is wrong to panic buy in the shops when there is no evidence suggesting goods will run out, it is also wrong to panic sell your investments.
In these increasingly worrying times one thing to do is Stay Calm and Remain Invested.