RE: Red Braces Brigade27 Jan 2022 08:51
Interesting article in the Telegraph today. Echoes some thoughts from you George experienced chaps. If only I could hold myself to them.
So, how should investors navigate this volatile environment? Here are five suggestions that have worked for me:
First, ignore it. This too shall pass. Some air will be released from the technology bubble and in due course the gap between the sector’s overoptimistic valuations and those in the rest of the market will narrow and investors will once again focus on those companies’ better growth prospects at a more sensible price.
Second, be diversified. It’s amazing how relaxing it is to see that while the market has fallen by 10pc, your portfolio is only down by half as much because your investments are better balanced than the index.
Third, if you are still putting money into your investments, do it regularly and mechanically. That way you will force yourself to invest when it feels least comfortable. And in due course you will be glad you did.
Fourth, keep some cash in your back pocket. When the next wobble arrives that doesn’t resolve itself within a day but persists for weeks on end, and inevitably overshoots on the downside, you want to be able to take advantage. You might, for example, think Scottish Mortgage looks a lot more interesting at £10 a share than it did at £15.
And finally, keep a notebook in which you write down exactly what you are thinking every time you make an investment. When the headlines are shouting about corrections and bear markets and market movements that have only happened half a dozen times in your investing lifetime, you can remind yourself of why you got into this in the first place. And, most likely, why that reason holds true today.
Good luck today all
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