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Wall of Worry!

A Timeline of Negative World Events

We have all been there, you wake up bright and early, head down for breakfast and open the paper or turn on your iPad and there it is, the stock markets seemingly heading south at a rapid rate.

What should you do? The main thing is not to panic because investing is a long-term activity and as shown below there has been long term growth in world equity markets, despite a never-ending stream of negative world events.

Despite ongoing uncertainty, £1 invested at the start of 1988 grew to £6.59 by the end of 2020. This is an average annual return of 5.88%.

Those of you who have been with Financial Planning Concepts for a long time will remember the shock of 2008 during the global financial crisis and the affect it had on your portfolios, but they recovered. And in early 2020, as well as learning that there was a virus at large which was a potential killer, the global markets plummeted giving everyone a significant shock and again your portfolios recovered relatively quickly. (*Between January to April 2020, the FTSE 100 index initially declined by 24%, our popular ‘Medium’ EPIC portfolio went down by 16%. By the end of 2020 EPIC finished the year around 19% higher than when it started, whereas the FTSE was still 12.5% below its starting level).

In summary the best thing to do when investing becomes scary is to hang in there and wait for the markets to recover, trust EPIC to do its job and look forward to future returns when the immediate shock has settled down.

Investment involves risk. The value of investments, and the income from them, can go down as well as up and you may get back less than the amount invested. Past performance is not a guide to future results. Annual management charges apply.

*Source – Clever adviser portfolios & MSCI UK Jan 2012 – Dec 2020