€10,000 invested in 1982 would be worth €209,000 in 2020! This is the history of a “typical” managed fund throughout the years. That is an incredible 1990% growth rate despite vast market fluctuations during that period of time.
Markets have shown an incredible crisis recovery characteristic and have bounced back and grown from two of the biggest crashes in history; The “Dot Com” crisis in 2000 and the financial crisis in 2008. The phrase “time is a healer” is certainly true in the case of the markets and have show that given time investments can recover and grow and pension funds regain their value.
In this article our experts share a couple of strategies that can be used to manage investments during the pandemic.
- Avoid letting emotion guide your decisions
While many investors are wondering how to manage their investments during the pandemic too often decisions are made based on emotions and how one feels rather than analysing the situation logically. Taking radical actions or making investment decisions based on emotions could and probably will lead to a lot of pain for investors! Keeping control of your emotions is important when making any decision.
- Diversify to spread risk
Trying to time the recovery is a tricky business and even the professionals find it hard to do this accurately. As individuals we cannot control the time it will take for the markets to recover and our investments to improve but what we can control is where our money is invested.
Diversification is a valuable strategy to potentially get more consistent returns and smoothen out the ups and downs. Diversification means spreading risk by mixing a range of asset classes within your portfolio. A well-diversified portfolio might include equities, bonds, alternatives, property, and cash and helps smooth the return over the long run. Events like Covid-19 can have a significant impact on your investments but also give a good opportunity to invest.
- Get advice from a qualified professional
It is important to get advice when making a new investment or reviewing an existing one. Whether it be a lump sum investment, savings plan or pension we can help you navigate the sometimes vast investment market.
Whether you only require reassurance or advice on your finances we provide a free service that can help your current situation. Our Qualified Financial Advisors work flexible hours to suit your schedule and can advise face to face, phone, email or video call.