Over the years, a considerable range of extensive research has been conducted, all drawing the same conclusion. Historically, there are continuous economic cycles and major global events that drive and sometimes shock the markets positively and negatively. Nonetheless, evidence has shown that markets have and do recover; it’s rather a question of when.
Seeing your investment values decrease can be difficult to deal with emotionally. However, we’d like to take this opportunity to remind you that continuing with your original strategy will provide greater dividends in the longer term.
It’s important to remember that the markets are made up of the largest companies in the world, and while they are not immune to market forces, they know how to make profits and will continue to do so. The graph above shows that ‘time in the market’ is a significantly more beneficial strategy than trying to ‘time’ the markets.
While transferring into cash may feel like a plausible option, inflation is expected to potentially reach 10% by the end of the year, so there’s no respite. You also need to consider when you would re-enter the market if you were to employ this strategy. If you re-enter too early, you could suffer further loss. If you’re too late, you could miss the recovery of your investments.
Overall, the historical evidence demonstrates that history does repeat itself, not only on the negative but also on the positive side. Hence, our experienced team of advisers encourage our clients to remain investing and ride this period out.