Further to our ‘This too shall pass’ email last week (click here to re-read it) we thought we would send another (hopefully) reassuring email.
If you wish to reply by email, please reply to ross@taylortaylor.co.uk.
If you wish to discuss anything please call the office, as always, we are here for you.
We understand, within the current climate, it’s a worrying and uncertain time for everyone, but we’d like to offer you some reassurance. The safety, health and wellbeing of our clients and staff is now, as it is always, our absolute priority.
We are monitoring the Coronavirus COVID-19 situation closely and we would like to reassure you that we have made provisions for numerous scenarios, and expect to be able to deliver our services as usual.
We will be in touch if you have any meetings already arranged with us and will discuss the most appropriate way forward with you individually.
Additionally, we will also likely be working from home and during this time, you may experience changes in how calls are handled.
We appreciate your ongoing cooperation in this difficult time.
Attached is a document that may be of interest, a bit of light hearted fun in these tough times:
1) Emoji guide to investing (a fellow financial planner ‘created this’ and now ‘sells the rights’ to financial planners to use it to raise money for charity). Click here to download it.
We’re still deep in the pandemic, this is a once in a lifetime public health emergency. In the investing world this is called a ‘Black Swan’, something you thought was impossible, until you see one.
Stock markets (humans) have acted as we’d expect, negatively. The stock market is a story, the story changes, the prices change. Now the story is very negative, when the story changes the prices will change again. The stock market overreacts in both directions. This is because the markets feed off two powerful human emotions, that of greed and fear. We don’t know with foresight when the market will ‘turn’, anyone who tells you they do, run for the door, it’s not an untruth, it’s a lie.
You already have a perfectly diversified portfolio, ideally suited to your long term goals. Built to cope with the deep temporary declines we’re experiencing now.
I’ve always told you a storm was coming…well, now it’s here. We never leave our car during the blizzard. We wait until it passes. Be patient.
I’m invested in my most volatile (‘risky’) portfolio, so my life savings have felt every drop of the decline, I have ‘skin in the game’, it’s painful to see my portfolio decline, but as a student of history and more importantly human nature, knowing that the correct thing to do is ‘do nothing’ will see us all through this. We have enough to deal with through the change and disruption of our lifestyles, let’s not compound the issue by making grave financial mistakes with our investments.
The nature of risk is that you don’t see it coming. Now for some good news. Going into this crisis we could not have been in a better position economically, a decade plus of prosperity, unemployment at historical lows, businesses with more cash than they’ve ever had and the personal balance sheets of individuals at a high. There’s never a ‘good time’ for a pandemic, but if I could have chosen a point in time, this would likely have been it. We also have a globally connected world and have all the utilities and resources to address this head-on.
When the stock market rises you don’t ‘win’ money, just like when it declines you don’t ‘lose’ money. You only lose money when you commit the worst financial action an investor can make, selling a portfolio in a declining market. This is the action reserved for the DIY investor and the financially failed investor.
As Warren Buffett says:
“The stock market is a device for transferring money from the impatient to the patient.”
Successful investors are patient, failed investors are impatient.
If you’re investing every month (which many of you are) this is a deep temporary market sale, which is good news for your automatic monthly investment premium.
Ross & The Taylor & Taylor Team
p.s. We never like to make predictions, but we are almost certain we’ll be heading into a global recession. Recessions are part of the natural business cycle. The stock market is usually ahead of the economic cycle, however no one really knows. Don’t let the media scare you now with the big ‘R’ word. The economy expands and contracts, it’s what it has always done.
Some useful links:
Infographic: Visualizing the History of Pandemics (courtesy of Visual Capitalist)
