In turbulent times an IFA will help you weather the storm

Published by Daniel Robertson on 23 September 2020

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During periods of uncertainty, the stock market can take a battering and there is a temptation for individual investors holding standalone investments, portfolios or investments within pension or ISA wrappers to make knee jerk decisions and sweeping changes overnight.

Whilst these periods can be uncomfortable, those with an Independent Financial Adviser (IFA) should have the confidence and peace of mind that they need not panic or make rash decisions.

If you don’t have an IFA or are looking for a new adviser then get in touch with our team today.

A tailored investment portfolio

An IFA will take the time to get to know you, discussing your personal circumstances and goals to create a tailored investment strategy, blending different investments into a single portfolio, whether your objective is capital preservation, the generation of income, capital growth or a mixture of all three.

In addition to their own knowledge and expertise, they may also draw on institutional research, giving you the confidence that any recommended investments should be the best in sector.

The key is to build a diverse investment portfolio consisting of asset classes that accurately reflect an individual’s risk tolerance. Typically, a portfolio will contain equities (stocks and shares), gilts and corporate bonds (loans to governments or companies), property and cash, which all hold different degrees of risk. Your adviser’s expertise in determining the exact content and appropriate percentage of overall investment held in each for you personally is therefore crucial.

Disciplined investing

An investors attitude and actions during negative growth periods is as important as the portfolio’s structure. Successful investors tend to be pragmatic and realistic, investing for the long term, expecting that, while there will be good times, there will also be some not so good too. Deviating from a well thought out, long-term plan in such a febrile market environment is typically an emotional response, rather than a disciplined one which an IFA would advise. A recession or short-term downturn should not be seen as a reason to panic, providing that a portfolio continues to meet personal criteria and is well diversified.

It is important to remember that corrections are an inevitable feature of investing, and that markets do recover in time. Whilst no one knows for certain how future events will play out, or how markets will react in the coming weeks and months. What is known, is that whether the next move for markets is up or down, longer term investors have the time to ride out the peaks and troughs.

Regularly review your portfolio

Recognising that your circumstances and requirements will change and evolve alongside your life ambitions it is important to regularly review your personal circumstances and content of your portfolio with a professional IFA at least annually.

Your IFA will ensure that your portfolio and portfolio volatility remains aligned with your objectives, taking into account opportunities of the inevitably changing investment conditions.

As published in Kent Life & Sussex Life – September 2020

Contact our Financial Planning team on +44 (0)1227 768231 or provide your details on our online enquiry form if you would like start your discussion with an IFA today.

The content of this article is for information only and does not constitute formal financial advice.

This material is for general information only and does not constitute investment, tax, legal or other forms of advice. You should not rely on this information to make, or refrain from making any decisions. Always obtain independent, professional advice for your own particular situation.

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