At the time of writing this the FTSE 100 Index is back above 6000, a gain of over 20% from the March 23rd low, with the Dow Jones recording an even better recovery.
So why am I concerned and feel the need to sound some notes of caution?
I have over 30 years of experience as a Financial Adviser and have seen false rallies during stock-market recoveries many times before. It is not at all unusual for there to be significant falls from what appears to be a recovery before we are really on the right road again.
Two things are driving this surge. Firstly, Covid-19 medical statistics appear to be improving on a worldwide basis. Secondly, the Fund Managers running “Risk Rated” funds have been forced into buying equities to re-establish the correct ratio between equity and bond holdings in their funds. That process is now virtually complete.
On the other hand, economic forecasts/statistics seem to be worsening almost daily and markets are now at a level where most people no longer consider shares/funds to be the bargain they were a month or so ago so purchases could dry up very quickly.
My message is to not get over-excited about where we are or depressed if we see significant falls over the next month or so.
If you still have money invested in equities which you may need to access in the next three years, this may be the time for some modest encashments.
If you have money available to build your medium/ long term investment strategy don’t be tempted to wait for the market to fall in the hope you can get close to investing at the bottom. Trying to make that type of decision will drive you crazy.
Just accept that, even at current levels, you are investing at considerably lower prices than a couple of months ago but try to benefit from any falls by taking averages and by investing in equal proportions over, say, the next six months.
If you accept that guidance, whatever you do stick to the process once you have made the decision. Otherwise, you will be asking yourself whether to continue to buy every month. There will always be something telling you “not today”. Trying to make the right decision will drive you crazy and the strategy just will not work unless you are very disciplined and don’t try to to be too clever.
I am spending most of my time just now providing support for my existing clients but if you think my investment guidance service could be of help to you I have allocated a few slots for a preliminary 15-minute Zoom meeting so that we discuss how I could build your investment confidence/results.
If you are worried/concerned phone or text me, Richard, on 07770 575122 and let’s see if I can help. I am not a regulated financial adviser and nothing I say should be treated as personal advice, but I do believe my previous experience as a financial adviser and current experience as an investor and investment/retirement coach could be very valuable to you.
Retirement Risk Zone
If you are in what I call “The Retirement Risk Zone“- the three 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 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.
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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