Coronavirus - ensure your investments are diversified and match your agreed level of risk

Graham Burnett

Graham Burnett

Chartered Financial Planner

When markets are fluctuating it's all too easy to focus in on the performance of certain investments and assets while forgetting about the bigger picture.

When one asset is performing poorly others may be flat or rising. A diversified portfolio including a range of different assets can help to iron out the ups and downs and avoid exposing your portfolio to concentrated areas of undue risk.

At Johnston Carmichael Wealth, our investment strategies and solutions are multi-asset, providing a diversified portfolio matching the level of risk agreed with each of our clients.

Always invest for the long-term

Many people believe that knowing when to buy and when to sell is the secret of successful investing. The truth is that no one knows with certainty when markets will rise or fall. Trying to time the market is very seldom successful.

It is always best to focus on your long-term goals and how investing over the longer term will help you achieve these, rather than basing investment and planning decisions on what has happened over a few weeks.

Over the years we have witnessed many events that have had a significant negative impact on financial markets, COVID-19 being the most recent. However, history shows that the best strategy is to remain calm and maintain your long-term perspective.

Stay invested

When markets are volatile, it is often tempting to exit or switch to cash in your investments and solutions in an attempt to reduce further expected losses.

In the current climate, people may jump to react emotionally to the sudden changes we are seeing in the market, however this can often have adverse effects. We must remember it is impossible to time market movements.

What we do know is that being out of the market in volatile times and missing the upside days and weeks can have a huge detrimental impact on long-term returns. The phrase “it’s time in the market, rather than timing the market” has never been more appropriate.

As everyone’s personal circumstances are different, it is important to contact your financial planner and review your plan. 

Please note: This communication should not be read as a financial advice. Past performance is not a guide to future performance. While all possible care is taken in the completion of this blog, no responsibility for loss occasioned by any person acting or refraining from action as a result of the information contained herein can be accepted by this firm.