Hello to all the VJC Wealth community,
With recent falls on the Nasdaq, the long awaited interest rate rise finally happening here and the conflicts and other problems around the globe we are in the midst of the correction that was expected by most of us.
Rapidly highly inflated investments have lost substantial ground, again expected and some would say necessary.
A call today from a new client from late last year regarding the fall in their investment balances prompted me to write this blog update, the information provided in this post will apply to all clients and help most realise their best reaction is no action for now. In that particular client’s case their timing on entry has contributed to their investment balance reduction.
To all of our VJC Wealth community we are here to assist and guide you in both the good times and the challenging ones.
Remember:
• When preparing and discussing your wealth plan in your advice document we explained and assessed the concepts of risk profile, investment timeframe and diversification as well as market volatility.
• For the past 2 years we all knew and discussed that property and share markets were at very high points in the market cycle and interest rates were at all-time lows across the globe.
• You have professional adviser to provide you with information, objectivity and assist you in keeping your emotions out of your decision making.
The conventional wisdom in volatile times is to stay focused on your plan and not be distracted by world events and poor outcomes i.e. “think long term”.
Our recent posts explain this clearly:
Another World Event Causing Market Volatility
That Time Again – Market Volatility
Basically, unless something has fundamentally changed since your plan was devised, then it is highly likely your desire to make a change to your investments is motivated by disappointment and not research or historical information.
The following article also explains this well:
Staying The Course Versus Timing The Market
Investors seldom time selling out and buying back into the markets successfully, the following video discusses this.
For nervous or less experienced investors, if it helps, experts do recommend during periods of volatility whilst you wait for the recovery it may assist to not check your investment balances daily.
It is highly likely that markets will fall further in the near future given there are many global events (Russia, elections here and abroad, natural disasters, markets correcting and post pandemic issues) and potential events like China in the mix, so remember it is normal and we understand you will be concerned, and we welcome a call to discuss your thoughts and provide our recommendations.
This is our role as your wealth coach and adviser.
Thank you
The VJC Wealth Team
