18 May 2020
Understanding the interaction between volatility and returns is a fundamental part of being a good goal-based investor.
This is especially important at times such as now, when we’ve seen daily able swings in market values as global markets try to get to grips with the fallout from the coronavirus (COVID-19) outbreak.
As you work towards your investing goals – whether that’s planning for retirement, funding your children's education or making a large purchase – it is important to understand the relationship between the two and find a balance that works for you.
If the financial markets have taught us anything over the long term, it is that upward markets are often followed by corresponding downward markets, and vice versa.
It’s called ‘volatility’, and it always has been, and always will be, the pulse of the market.
Here are three things to remember:
Market swings are common and can be unnerving, but down markets may present buying opportunities.
Buying while prices are low may allow investors to reap the rewards later.
The keys to weathering market volatility include maintaining realistic return expectations, taking a long-term investment approach, avoiding market timing, and diversifying your assets.
By learning how to navigate the ups and downs of the market, you can put market volatility into better perspective to help remain focused on your long-term goals.
If you are planning your financial future, Aberdein Considine can offer you the support of some of Scotland's most talented and respected independent financial advisers.
Whether you want to buy a property, secure an income for retirement, pay for your children's education, provide for dependents or pass your estate to your family, we can provide you with a high-quality service which is tailored to your lifestyle.