Turmoil in the markets

We are conscious that our clients will all have been watching or listening to the ongoing news reports (some of which barely stop short of inducing some form of alarm, if not panic) and will be aware of the difficulties in both the US and the Eurozone, which is impacting global stockmarkets.

We appreciate that this can make investors nervous and current events are definitely of concern. We are not in any way trying to underplay the significance or impact of the turmoil that is happening around the world.  However, we would wish to remind clients that investments are for the medium to long term and we would urge people not to pay too much attention to short term volatility.  Historically, investors who have chosen to exit falling markets and reinvest once they have recovered, have seen substantially lower returns over the long term as they have not benefited from what could be a sudden and sharp upswing.

Where relevant, EIC and Independent Women have already taken steps for all their clients over the last 18 months to reduce their exposure to the Eurozone and increase exposure to the UK in favour of global markets, as we felt that volatility in the UK would be less pronounced over that period. 

We still feel that investment opportunities remain and that there are strong prospects for returns over the medium to long term, although we cannot of course guarantee this.  We continue to review our clients portfoilios and make changes where we consider it relevant or appropriate, depending on the clients' own risk appetite, the balance of their portfolios and any changes in circumtance or requirement.

There are many views on how long this volatility will last - ranging from a few days, to six months or beyond. The truth is that no one has a crystal ball, but economics does goes in cycles and investments are made for the longer term. Those who are close to retirement age may be concerned or confused as to how this could impact the amount of pension they will receive. Given the complexity of pension legisaltion and the many changes we have seen in 2011, anyone who is approaching retirement and who does not yet have an independent financial adviser, should seek out some expert advice.

Remember that savings, unlike investments, are not going to fall as a result of stock market moves.
Interest rates are low for savers, but there is now greater protection for their money than there was at the height of the banking crisis.
Full compensation up to £85,000 per saver, per authorised institution is paid to those who deposit money in an authorised bank or building society if it goes bust.
For investment products, the first £50,000 is covered per person, per firm.

The best thing to do is try to mix and balance what you have - however much or little you feel that may be at present - and to plan for the future. Expert advice can really earn its spurs at tricky times like this and help you navigate some of the confusion and complexity.