Weathering the Storm Together

Stock markets around the world are suffering a major period of volatility as a result of the COVID-19 outbreak. Although markets do not respond well to periods of uncertainty, what is certain is that volatility goes hand in hand with stock market investment; and although market movements can be concerning, we have all become much better at expecting the unexpected, experience has taught us that. On Budget day, both the Chancellor, Rishi Sunak, and the outgoing Governor of the Bank of England, Mark Carney, were keen to emphasise the temporary nature of the economic impact of COVID-19.

Focus on the Long-Term

To navigate market volatility, it’s best to stick to your plan, diversify your holdings and very importantly, expect and accept volatility. Investors with diversified portfolios, who stay in the market, have historically and consistently experienced steady gains over time. Even though it can be difficult to ignore daily market movements, it is vital to focus on the long term and remember that volatility also presents investment opportunities.

A Clear Head Will Stand You in Good Stead

…“keep your head when all about you are losing theirs”

As Rudyard Kipling wrote, it’s important to “keep your head when all about you are losing theirs.” Investment requires a disciplined approach and a degree of holding your nerve if markets fall. Investment professionals know that markets can be volatile and will inevitably go down as well as up from time to time. The worst investment strategy you can adopt is to jump in and out of the stock market, panic when prices fall, and sell investments at the bottom of the market.

Finger on the Pulse

Instead of being worried by volatility, the best strategy is to be prepared. A welldefined investment plan, tailored to your objectives, in line with your attitude to risk, that takes into account your financial situation, can help you weather short-term market fluctuations. Market volatility is a timely reminder to keep your investments under regular review.

We aim to manage the inherent volatility of markets, so your savings have the best chance of growing for the future – without giving you sleepless nights and whilst ensuring you aren’t taking too much, or too little, risk with your money.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

It is important to take professional advice before making any decision relating to your personal finances. Information within this newsletter is based on our current understanding of taxation and can be subject to change in future. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Taxation depends on individual circumstances as well as tax law and HMRC practice which can change.

The information contained within this newsletter is for information only purposes and does not constitute financial advice. The purpose of this newsletter is to provide technical and general guidance and should not be interpreted as a personal recommendation or advice.

What is a Megatrend?

Global megatrends are sustained, macroeconomic, transformative developments, that may alter the trajectory of the economy, business, society, cultures, and our lives, to define and shape our future world.

The implications of these trends are diverse, presenting both opportunities and risks. Megatrends don’t exist in isolation. The interconnectivity of our world means trends overlap and investment themes appear. Recent research1 has highlighted some megatrends expected to shape our lives in the next couple of decades, these include rapid urbanisation, climate change, demographic and social change, shifts in global economic power and technological breakthroughs.

1PwC and BlackRock/iShares, 2020