Investing in uncertain times - should I worry?

September 8th 2008

Although it’s tempting to get caught up in the hype surrounding the recent fall in share prices, it may be sensible to step back and make investment decisions with your head, and not with your heart.

The current volatility in the stockmarket is nothing new. Research undertaken by Reuters shows that the market’s peaks and troughs are marked by investor emotion which can swing suddenly from optimism to despair. Although it can be unsettling at the time, prices normally return to sensible levels once investors regain their confidence.

Putting the present situation into context, the current price falls are no greater than in previous setbacks, such as the stockmarket crash in 1987 and the more recent dot.com crash of 2000. Looking back, even though they seemed catastrophic at the time, these setbacks were mere ripples in what has been the stockmarket’s upward trend.

Over the years, investing in equities has proven to be very rewarding as they have not only beaten inflation, but outperformed gilts and cash. However, it hasn’t been a smooth ride, with many ups and downs along the way. It’s always important to take a long-term perspective on your investments. Remember cash on deposit is secure, generally more accessible and provides greater certainty of growth.

If you would like more information on investing in these uncertain times, contact Niall Gunn on 0113 2878213.