Following a couple of months of exceptional investment returns, March has seen markets pull back on news out of Iran, and asset prices have, unsurprisingly, become more volatile. We understand that some clients may reach out amid the uncertainty for reassurance, so we have pulled together some commentary below and linked our new ‘Why Stay Invested’ information pack, which may provide some helpful talking points.
In times of market stress, history provides clear lessons about how investors should respond. The challenge, however, is that we are human. When markets become volatile, it is natural to feel anxious and to imagine the worst, often amplifying what is already a stressful situation.
We also recognise that major market events are often linked to wider global issues and human tragedies. While it is important to acknowledge these realities, separating them from financial decision-making can be difficult but is essential.
During these periods, headlines tend to focus on the most negative statistics and forecasts. When markets are falling and the news flow is overwhelmingly pessimistic, it can feel as though you should be doing something, moving to cash, selling investments that were recently performing well, or making significant changes to your portfolio.
However, history consistently shows that reacting emotionally to short-term market movements is rarely beneficial. For long-term investors, the most successful approach has typically been to remain invested in a well-diversified portfolio of assets managed by professional managers.
The charts we have included in the ‘Why Stay Invested’ information pack highlight several historical examples that illustrate this principle and reinforce the importance of maintaining a disciplined, long-term investment strategy.
If you need anything else, or if a more difficult client query comes your way and you would like a written response, then please do reach out to the team and we would be more than happy to help.
This communication is designed for professional financial advisers only and is not approved for direct marketing with individual clients. These investments are not suitable for everyone, and you should obtain expert advice from a professional financial adviser. Investments are intended to be held over a medium to long term timescale, taking into account the minimum period of time designated by the risk rating of the particular fund or portfolio, although this does not provide any guarantee that your objectives will be met. Please note that the content is based on the author’s opinion and is not intended as investment advice. It remains the responsibility of the financial adviser to verify the accuracy of the information and assess whether the OEIC fund or discretionary fund management model portfolio is suitable and appropriate for their customer.
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We provide the DFM MPS as both distributor and manufacturer. Details of our target market assessment can be found in our compliance investment procedures, available upon request. Each fund will be assessed independently, but it is highly unlikely that any one fund held in our portfolio will meet the target market in isolation—detail of why the inclusion collectively will be suitable is included within our research. The DFM MPS performance and displayed underlying portfolio charge is produced using the preferred share classes, this may differ from platform to platform and is shown net of fund fees only, they do not incorporate platform costs, adviser’s client fee or DFM service charge.
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