I don’t doubt that many people will think that investing is relatively straightforward and they would do a good job themselves, and to be honest on a lot of occasions that “might” just be true – but it certainly doesn’t apply over the last few months.
Up to the middle of September I would say the markets were reasonably stable – if to be honest you can ever use that word for the markets, but they were not terribly volatile. That cannot be said for the last few weeks though when we made up for all that “lost” volatility. The Dow Jones over a few days lost something like 3.2% and that’s an awful lot in just a short period. Now bear in mind that American stocks can make up something like 50% of global stocks and that will let you see how this one change can ripple into other areas. A lot of countries and economies will also be reliant on the American market and so their indices will also feel the pinch as well – and so it goes on. America after all, is the biggest economy in the world, so what happens in America will affect everyone else – even the UK.
Now if we as stock-pickers did a knee jerk reaction when the Dow falls, then in my opinion that would put you in a worst place because unless you specifically know why the Dow fell – then you should do nothing. With the likes of investing, I have a wee saying – when in doubt – don’t, and this basically goes for everything. Unless you know in detail why an index fell – you should not do any knee jerk reaction at all and just sit tight. Let things pan out and once they have settled THEN you can act, but not before. If you did do a knee jerk reaction you could be making the matter a lot worse – so sit tight.
Once things have settled, then you need to do your analysis again so that you can maybe see what the effect has been – has some funds risen – what has lost – and if you do your research you will be able to see the trends shaping up and that will point you in the direction where you should be going. You might see global funds falling, tech funds rising – it’s all a question of doing your analysis and trying to make some sense of the end result.
That’s what we do at MAP, and what we have noticed of late is that some UK funds seem to be getting a bit stronger, European funds are starting to grow a bit better, technology funds have fallen back a bit – and so on.
At MAP we do our research regularly, so that we can identify what funds are getting better and so might come into our vision for putting some money into them – as long as they have some consistency behind them of course, otherwise you might just get a flash in the pan – so to speak.
When we invest money for clients we do our research time and time and time again – because we need to be sure that our clients will benefit from the funds that we use – and you can only choose funds that you have researched. INVEST THE MAP WAY.
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