- Financial Planning
- Estate Planning
- Employer Services
- Our People
- About Us
- Contact Us
07 Jan 20
Investments: Time in the market – not timing the market
Having advised clients over the last 20 years, a number of events have occurred that have triggered potential investors to consider delaying investment or to consider moving their investments into cash. I think of things that have occurred that nobody at the time prior considered possible – World Trade Centre attacks – 2001; Indian Earthquake and Tsunami – 2004; Credit Crunch – 2008; and yes Brexit.
I took the time to speak to each and every one of my clients on Friday, 24th of June 2016 following the referendum result. With the media reporting financial catastrophe I thought it prudent to put things into perspective. When David Cameron announced there was to be a referendum the FTSE 100 stood at 5,950 (20.02.16) – it closed at 6,138 (24.06.16) following the result being announced and finished the year the day before Christmas Eve at 7,068 (I generally have the Christmas period off).
As I write this, the FTSE 100 stands at 7,550 (06.01.20) up 26.9% since the date for the referendum was set under 4 years ago (and in addition shareholders would have received an average dividend of 3.5% per year on top).
At a recent annual review meeting, a client who was considering investment at the time of the referendum result commented that he could not believe that Brexit was still under discussion having had concerns about its potential effects at the time of investment. We moved quickly on as most of us tend to these days and got back to discussing how he plans to spend the money he has made in the meantime.
The key to successful investing in my experience is having the correct structure, understanding how and where you are invested and knowing what the potential downside risk is when events overtake us in the short term enabling successful investors to ride out any storms. Predicting when to invest is perilous – being invested makes you money given time.