It’s 11:00am on a Thursday morning. Outside it’s windy and dry but the sun is shining bright. From across our open plan office Cassie gets my attention…

“Chris” she starts “I’m doing some work for John and it looks like his pension value has dropped recently”.

Cassie looks worried…

“What shall I do?”

My answer was clear…

“Do nothing”

You see the stock markets are pretty volatile at the moment. You can pick up any newspaper or watch or listen to any TV or Radio news show to see that the spread of the coronavirus has had an impact on the global economy.

However, whilst the deaths that have occurred due to the virus are clearly tragic and permanent, the reality is that the impact on the money we’ve invested is unlikely to be either. As long as investors we do the right thing…

Nothing.

You see when you invest and markets are having a wobble and your investments temporarily reduce in value the only way you’re guaranteed to lose money is if you sell an investment when it’s worth less than you paid for it…however doing nothing and waiting for the market to recover is the sensible thing to do.

One thing I always say to new clients, and reiterate every single year with existing clients goes like this…

“One of the important things I need to tell you is that there will be an occasion, and probably quite a few times if we work together for long enough as we both intend to, where your investment portfolio will drop in value. I don’t know when it’s going to happen or what’s going to trigger it but history tells us that it will…

The drop will depend on how much risk you’ve decided to take and you’re more than welcome to pick up the phone and talk to me. However, I can tell you now what I’m going to say…

I’m going to recommend you do nothing.

You see you pay me to help you achieve your longer-term financial goals. By selling assets when markets are low, we’re putting the achievement of your longer-term goals at risk….and that’s clearly not something you or I want to do.”

However regardless of whether you’re a client or not…please take this guidance.

Understand that the nature of markets means that every now and again markets go down…

Understand that you only lose money on an asset when you sell when markets are down…

and

Understand that if you work with an adviser their job is not only to support you to achieve your financial goals, but educate, inform and guide you to make the right decisions with integrity designed to support you to achieve your longer term financial goals…

I hope that helps…