Wow, what a tumultuous week we had recently in financial markets. Britain unexpectedly votes to leave the EU and suddenly the world is full of ‘Chicken Little’s’ proclaiming the sky is falling! Now, I am certainly not one to underestimate the gravity of such a decision, but sometimes these events can be blown out of proportion.
Thankfully the dust is starting to settle and some normality is returning to global financial markets. Major geo- political events are always bound to stir up investment markets, with the only uncer- tainty being for how long. But often, the accompanying
media coverage of such events can be very unsettling for an investor, with all manner of investment experts chipping in with their opinions.
Many investors begin to panic and look to unwind their more volatile investments, seeing this as the best way to deal with a situation. History though, has taught us many lessons and not least of all that these type of events have a limited time to run before normality returns.
A quick reaction may actually sooth the jangled nerves of
an investor in the short term but may hinder long term progress towards a desired goal. If you can recall back 12 months ago we were in a similar’ boat’ with Greece threatening to leave the EU. Slightly different, yes, but still the same volatility and uncertainty, and we got through.
Investment strategies, whether for superannuation, investment portfolios or savings should have been formulated with volatility in mind and expected. Short term reactions based on a chorus of opinions is not the best course of action to achieve your desired goals.
At critical times for investors, such as that we have just gone through, ‘don’t panic’ is often the most common phrase, but in most cases is incredibly sound advice.
Remember a competently developed and conceived investment plan will provide the required amount of ‘chamomile’ to allow you to sleep through the night even in the most difficult of times.
