How To Deal With Market Uncertainty
Please note this blog post was published over 12 months ago and so may not include the most up-to-date information, for example where regulation around investing has changed.
For the first-time investor, it can feel intimidating to hear about “risk” when putting savings into a Stocks & Shares ISA, particularly when rolling news on Brexit suggests market uncertainty.
However, despite risk and unpredictability in world events, there are things you can do when investing to help deal with market uncertainty.
Choose a reputable investment
You’ll want to make sure you are trusting your money to a reputable establishment. At True Potential Investor, we work with world-renowned fund managers including UBS, Allianz, Goldman Sachs Asset Management, Columbia Threadneedle, Schroders, SEI, Close Brothers and 7IM.
Choose a diversified portfolio
Diversification is similar to the concept of not putting all of your eggs into one basket. By investing your money into a diversified portfolio, you are reducing the amount of risk you are taking.
Investing for the long term can help you to ride out any fluctuations in the markets. In the short term, events such as Brexit can cause markets volatility due to uncertainty about what will happen next. But in the long term, you have the opportunity to ride out these fluctuations.
Take a look at the FTSE 100 and observe where it was a decade ago and where it is today. Even with major events such as 2008 crash, if you’d have invested in the FTSE 100 in March 2003 and sold in March 2013, your 10 year return would have been 154%.
It’s important to remove emotion from your investment decisions. Human instinct could be to panic and pull out your money if you see it a short-term drop. However, it could be wiser to ride out fluctuations over time, with the aim of seeing your money grow over the long term.
One of the problems we have identified through our Savings Gap research is a financial knowledge gap in the UK population. By continually informing yourself on financial issues, you are likelier to be more confident in your investing decisions.
One way to improve your financial knowledge is to enrol in the True Potential Centre for the Public Understanding of Finance (PUFin) Open University courses. These free personal finance courses will top up your knowledge and empower you to make better financial decisions.
Another issue identified through our Savings Gap research is a technology gap problem. With the evolution of smartphones, tablets and apps it only makes sense that technology should be used to help inform your investing decisions.
With True Potential Investor’s award-winning technology, you can track your investment 24/7 across a range of devices, and using our world-first impulseSave® technology, you can top up your investment in seconds.
Keep in mind that our world is almost constantly in a state of some uncertainty, and while there are instances of recessions and crashes, it is worth noting the number of successful investors over many decades. By investing with a reputable name in a diversified portfolio with a long-term strategy you can give yourself the opportunity to benefit from financial growth.