If so you are certainly not alone. At the moment we are all fighting against millions of years of evolution. Our brains are hardwired to look for and spot danger and then to take immediate action. The grey matter will also tune in to anything which will support the need to take avoiding action from the perceived impending danger.
The result is that you will see Brexit dangers everywhere.
So it is no wonder that you may be getting closer and closer to making, what could well be, a disastrous selling decision. If things don’t go well, and there is a significant stock market fall, those who do sell will be congratulating themselves and telling the rest of us how clever they have been but that is not the end of the story because re-investing is an even more difficult decision than selling.
In my thirty plus years as a financial adviser I only had four clients who insisted on selling all their investments when they saw trouble on the horizon. When markets duly fell they were telling me how clever they were and pointing out that I should have been the one providing the selling advice. One, I remember, was particularly unpleasant.
But what happened next? As far as I am aware one never had the confidence to re-invest. If his retirement lifestyle over the past 15 years has been based on fixed interest rates he has certainly been missing out. The other three did re-invest but not until their confidence had returned, which, guess what, was when the market had returned to a level above the point at which they sold.
This story explains very well why the returns of the average investor lag well behind average market returns. Quite typically many good investment decisions are wiped out by one poor decision at the wrong time.
So what should you do?
- Check to make sure that you are entirely happy with the level of your cash holdings and that, on reasonable planning assumptions, you will not need to sell any investments linked to share prices for at least three years.
- Check to make sure that you do not have all your eggs in one basket. A good level of sector and geographical diversification is ideal.
- Check that you have a robust monitoring process in place. Not selling does not mean burying your head in the sand and taking no action.
- Check the level of fees and costs. If you are using a Financial Adviser total fees could be in excess of 2% per annum. That will have a huge impact on results over the medium/long term. Reducing fees could be even more important than trying to time markets.
Provided you are happy with all your answers put up a good fight and tell your brain this is no more than a normal stock market fluctuation and everything will work out just fine.
Retirement Risk Zone
If you are in what I call “The Retirement Risk Zone“- the thee years before retirement and the three years after – this is a particularly important time for you. Make the wrong decision now and it could have a major impact on your lifestyle for the rest of your life.
If you have any doubts about your ability (or your adviser’s ability) to get this right give me, Richard Cook, a ring on 07770 575122, and let’s talk about whether my guidance service and more than 30 year’s experience as a financial adviser can set and keep you on the right track.
Not in “The Retirement Risk Zone” but still feeling that you need someone to guide you through this minefield? It would still be worthwhile giving me a ring. I am providing guidance to clients at all stages of their investment/retirement journeys.
Still not sure? Check the testimonials section of the website. This is not theory. It is hard won practice and experience over more than 30 years. I have made all the difficult decisions for myself and am now confident that I have enough in my pension plans etc. to be confident that it is enough and that it will not run out.
If you are new blog reader and have found this useful click the box below to remain on the mailing list.
This document and our on going services are not personal advice. We'll give you all the help and guidance you need to make your investment and retirement decisions, but we can't advise you. If you're not sure whether you need regulated financial advice we can put you in touch with a suitably qualified and experienced regulated adviser. Because we are not regulated by the Financial Conduct Authority you will not have access to the Financial Ombudsman Service in respect of any complaints. If you use one of the "no advice" on line services to handle investment transactions they will be Regulated and you will have access to the Ombudsman and The Financial Compensation Scheme in respect of their services. The value of investments/pension plans can fall or rise depending on market performance. The Retirement Team and The Investment and Retirement Coach are trading names of Capture Success Ltd Reg No 01825075 Tel 07770575122