This Content Was Last Updated on November 5, 2015 by Jessica Garbett
Anybody reading the papers this last few day will have seen the volatility of share prices, with the FTSE 100 now at 6200 against a peak of over 6700 in early July.
Some call it a “correction”, others a “crash” – probably depends from where you’re viewing it.
So, how to survive? Well, we can’t give investment advice here, and neither do we have a crystal ball, but a few pointers:
– first, a loss is only a loss when you realise it. If you’re a long term investor, who know where the markets will be 6 months, 12 months, 5 years? Long term equities have always beaten bank and building society deposits hands down.
– secondly, think about your risk profile. If you’re heading for retirement or otherwise know you need access to funds soon, watch the market, or get a broker to do it for you, and when you think its at its best switch into something less risky. On the other hand if you are a long term investor, then you can afford to take a longer term view, survive short downturns, and await the future growth.
– think about your investment mixes. A mix of equities, property, managed funds (eg a pension) and cash is likely to be a good choice. Putting all your eggs in one basket, be it shares, buy to lets, whatever isn’t a good strategy.
– monitor your overall portfolio – equities, ISAs/ PEPs, pension funds, endowments and so on. Devise your own system for monitoring performance periodically – I do it every six months.
– if you are using an IFA or a broker make sure they are clear about your risk profile and goals.
– and finally, remember the price of shares may go up and down, you may not get back what you put in, yada yada – but you knew that anyway?