Without wishing to point out the obvious, there have been some very significant developments in the Middle East over the past week.
Firstly, I would like to send our well wishes to anyone reading this who has friends or family that have been affected in some way – I’m sure this may have presented some level of stress and anxiety.
I’m always humbled when I reflect upon the fact that we are trusted to look after (in most cases) a significant proportion of our clients’ liquid wealth. I am therefore switched on to the possibility that the military action in the Middle East may cause some level of concern.
This may be regardless of what I have discussed with my clients over the past few years during our ‘lifeboat drills‘, and my openness on the fact that a significant market crash is a case of when not if.
It does sometimes make you wonder whether we are becoming somewhat immune to conflict and suffering.
As of the time of writing, there haven’t really been any significant sell-offs in the markets.
Since the first bombs dropped on Iran on 28th February, the S&P 500 is down by just 0.5%, and the UK market is down 3.9% (noting, however, that prior to last weekend’s events, the FTSE100 was up by nearly 10% YTD).
Of course, this could all have changed by the time you read this. Or it might not. And that’s the problem – no asset management firm has a crystal ball and therefore none can predict the future, regardless of how many Chartered Financial Analysts (CFAs) they employ, how good their proprietary trading systems are or whether they employ an investment guru.
So, it’s at times like this that I will advise you to block out the noise, ignore the sensationalism in the headlines, and focus on the fact that your money is an investment with a 20/30/40+ year time horizon. Any significant short-term market moves appear as tiny blips when plotted on long term investment growth charts.
I therefore write this article with slight trepidation, as flagging up what’s going on in the context of your investments kind of goes against my messages.
But if markets aren’t collapsing…
There is an old-school way of thinking that if something is happening in the world (and likely the financial markets), then the best portfolio managers will be doing ‘stuff’. Yes, this is how the private banks will try and portray the value they are adding to their clients when market events happen.
The cynical side of me makes me think that they see it as an excuse/opportunity to trade their clients’ portfolios and make themselves (not necessarily their clients) a profit.
I’ve read it numerous times before, where the likes of Goldman and JPM and my ex-employer, HSBC wealth management arms seem to make larger profits during periods of heightened market volatility.
Sadly, I suspect this rarely translates into profits for their clients, however. But enough of the private banks for now, as I’ve already had a dig at them in one of my other articles on lending this month!
So what is my message to you?
There might be some room for rebalancing portfolios, which will be done with care and small movements, without losing sight of the long-term nature of your investment strategies.
I will communicate these changes to you clearly. But aside from that, my message is to remain calm and remember the long-term plan.
But we’re not robots. We’re human and emotions are completely normal…so if you feel you do need to speak to me and would like some reassurance, you can get in touch and book in some time, whenever you want.
📩 Email us anytime: info@charltonhousewm.co.uk
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