That said, while this has happened in the past, it may not necessarily happen in the future. In the short term, market fluctuations like we\u2019ve seen recently can be unnerving and make you \u2018feel\u2019 as if you\u2019re losing money. That\u2019s why it\u2019s crucial at times like this that you focus on staying calm and taking a long-term view, avoiding locking in short-term losses, and making sure you\u2019re properly diversified.<\/p>\n
While it\u2019s true that whenever you invest you need to accept that you could get back less than you paid in, worries during turbulent markets can mean it\u2019s easy to take a short-term view and effectively cheat yourself out of a potentially better performance. If you can keep your composure and take a long-term view, you\u2019re much more likely to meet your all-important financial goals, as these three golden rules highlight.<\/p>\n
Why is it so important to take a step back and keep the long term front of mind? Does it really make that much difference? \u2018Yes\u2019 is the short answer. Attempting to time the market can be a high-risk approach, especially when compared to making ongoing regular investments. If you think it could be an opportunity to invest while share prices are lower to potentially make higher returns over the long run, just be mindful that prices may fall even further and that past performance isn\u2019t a reliable indicator of future returns.<\/p>\n
During market falls, it\u2019s quite likely you\u2019ll be tempted to sell some of your investments and keep the money somewhere \u2018safer\u2019. But if you do, it means you\u2019re likely to be selling after markets have already fallen \u2013 and, crucially, before they rise again. That means you lock in your loss.
\nAlthough it\u2019s tempting to take your money out when markets fall, it\u2019s not normally a good idea. It is also almost impossible to distinguish between a genuine imminent crisis and a mere market wobble over an event that ultimately proves far less serious than anticipated. As a result, investors who spend too much time waiting for the right moment to invest may miss out on many of the gains.<\/p>\n
A diversified portfolio and a focus on the long term are often better defences than trying to time the market. Periods of market volatility are a valuable reminder of the importance of diversifying \u2013 of spreading your money across different types of investments, geographical locations and industries.<\/p>\n
If you\u2019re investing in only one or two of these, then you\u2019re actually exposing yourself to quite a degree of risk. But if you diversify across investments, it can help you achieve a much better balance between risk and return. It\u2019s so important that you regularly check where you\u2019re invested \u2013 across Individual Savings Accounts, pensions, shares \u2013 to make sure you\u2019re diversified.<\/p>\n
If you\u2019re still some years from retirement, your pension savings will have time to recover from any short-term losses. Even if you\u2019re getting nearer retirement or are already retired and relying on your investments for income, you shouldn\u2019t panic. There are things you can do to help shelter your pension savings from the worst of any market volatility.<\/p>\n
If you\u2019re getting closer to retirement, make sure you\u2019re in investments that will get your money to where it needs to be by the time you retire \u2013 whether that\u2019s buying an annuity, taking it all out as a lump sum or keeping it invested and taking a flexible income.<\/p>\n
If you\u2019re already retired, there are ways to help protect your money not just from market volatility but throughout your retirement.<\/p>\n
A PENSION IS A LONG-TERM INVESTMENT. THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.<\/p>\n
YOUR PENSION INCOME COULD ALSO BE AFFECTED BY INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS. THE TAX IMPLICATIONS OF PENSION WITHDRAWALS WILL BE BASED ON YOUR INDIVIDUAL CIRCUMSTANCES, TAX LEGISLATION AND REGULATION, WHICH ARE SUBJECT TO CHANGE IN THE FUTURE.<\/p>\n
PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.<\/p>\n","protected":false},"excerpt":{"rendered":"
Whether seeking income, growth or both, there are some basic rules to follow Volatile financial markets are an inevitable part of investing. On a day-to-day basis, the swings in stock market prices can be significant. However, over the longer term, things have tended to smooth out, with daily volatility having a lower impact on overall… Read more »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"_links":{"self":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/1671"}],"collection":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/comments?post=1671"}],"version-history":[{"count":0,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/1671\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/media?parent=1671"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/categories?post=1671"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/tags?post=1671"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}