Delve into the historical data about stock market performance and you will see that the graph is not a straight line but a mix of ups and downs.
Volatility is rife and investors expect gains and losses, but in the long term the only real certainty about the markets is they keep rising.
That’s why Nigel Green, chief executive of the world’s leading independent financial advice company, deVere Group, is urging investors to hold their nerve and plough money into the markets rather than try to cut their losses.
He explained that world markets are throwing up mixed data – while Wall Street has seen some growth, the UK FTSE and the Shanghai Composite have both fallen back.
Investment philosophy
“Savvy investors should be using this turbulence to their financial advantage,” said Green.
“I can see at least two benefits in investing in a falling market.”
Green went onto explain his current investment philosophy:
- Don’t try to predict market outcomes – No one can foretell when the market has hit the top or bottom of a peak or trough, but markets are predictable over the long term – they go up
- Kick the market when it’s down – Buy as cheap as you can but avoid procrastination
“If investors buy now, they will make more gains when the market rises, which is why investing in equities is seen as the best way to grow wealth in the long term.,” said Green.
Ride out volatile markets
“Delaying that investment decision could mean missing out on that growth.
“Don’t forget to diversify and take advantage of any slump in prices to boost your portfolio.”
Volatility is not necessarily bad if investors can afford to jump into turbulent waters rather than wait for the storm to clear, argued Green.
“Investing now means more wealth, financial freedom and security in the future,” he said.
“Of course, no one can say what will happen in the future, but past has shown us that markets keep rising over the years, so I believe the time to capitalise is sooner rather than later.”
deVere Group has offers financial advice to expats worldwide and manages more than £650 million of assets for clients.
