Global stock markets are experiencing a period of volatility as a result of the COVID-19 outbreak. Although markets do not respond well to periods of uncertainty and downward movements can be concerning, experience has taught us to expect the unexpected.
To navigate market volatility, stick to your plan, diversify your holdings and very importantly, expect and accept volatility. Investors with diversified portfolios, who stay in the market, have historically and consistently experienced steady gains over time. Even though it can be challenging to ignore market movements, it is vital to focus on the long term and remember that volatility also presents opportunities.
Investment requires a disciplined approach and a degree of holding your nerve if markets fall. The worst investment strategy you can adopt is to jump in and out of the stock market, panic when prices fall and sell investments at the bottom of the market.
A well-defined investment plan, tailored to your objectives, in line with your attitude to risk, that takes into account your financial situation, can help you weather short-term market fluctuations. Market volatility is a timely reminder to keep your investments under regular review – that’s our job.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.