At the end of January 2020, Britain officially left the EU (Brexit), meaning there would be new rules for how the UK and EU live, work and trade together.
Although the UK voted to leave the EU back in 2016, it left investors worried and puzzled as to what to expect with regards to their investment performance.
We can’t deny that the markets have been volatile, but any investor should expect markets to go up and down- Brexit or no Brexit.
‘Which?’ surveyed 2,112 UK adults in September 2020, and the results are as follows:
Of the 1,645 people with pensions and/or investments, 19% were ‘very worried’ about their performance, along with 32% who were ‘fairly worried’.
Brexit-fuelled volatility and uncertainty of markets means that taking care of your own pensions and investments may become increasingly difficult.
You may be tempted to dump your investments in times of uncertainty, as you don’t want your performance to stop under a certain level. However, by doing this you are usually doing more harm than good. Panic-selling often locks in losses and there’s a higher chance that you could miss out on any recovery.
If you are not already invested, now is the time. The deal has been made and the original uncertainty is over. The market volatility has shown signs of calming down, and there is opportunity for mid to long-term growth if you invest correctly.
Whatever you’ve read, or whatever someone down the pub has said about timing the markets, don’t do it. Jumping in and out of the market isn’t easy. In our 35+ years’ experience, we’ve found that staying invested and riding it out usually produces significantly higher returns in the long-term than those who have dipped in and out with their investments.
In order to best protect your investments, you should seek the help of a professional financial adviser to help diversify your portfolio. They will usually do this by considering your attitude to risk and will invest your money into a mixture of asset classes accordingly, which in turn will keep the effects of market volatility to a minimum.
It is likely that in times of underperformance in one market, the investments in another asset class will thrive, therefore balancing out the portfolio. This is a much more stable way of investing than if you solely relying on the performance of a single asset class, such as equities.
There’s no doubt that allowing professionals with years of experience to manage your finances is the safer option. For many, pensions and investments are the main source of retirement income, and the performance and management of these could make a significant difference to the quality of life you may have in retirement.
There is still some uncertainty over how the UK and EU will continue to work together and what the deal actually looks like in practice. But on the plus side, we have the certainty of a deal, and the prospect of a more secure future. And with a secure future, comes potential for investment opportunities in the mid to long term.
If you would like to know more about investing or our process, we’re hosting a FREE webinar on Wednesday 31st March 2021.
You can sign up for this by clicking the link –> Investment Webinar