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Investing during turbulent times

30th January 2023

Investing during turbulent times

It is only natural to ask whether it is worth investing or staying invested

With the current worldwide economic turmoil, lack of confidence in UK government and market volatility, especially when bank and building society rates are rising (at least in the short term), it is a valid question.  Slowing economic growth, elevated inflation and flagging fiscal and monetary stimulus do not paint a great picture for the future.

Doom and gloom and recent financial headlines all point towards a recession.  As it is likely that a recession will happen at some point, making sensible investment decisions is essential.

It is easy to get caught up in the here and now, but when a recession hits it can be easy to think that the sensible investment decision is to move away from the markets into cash to avoid losing any money.  However, this is often not the case, especially during times of rising inflation.  A knee jerk reaction does not consider the bigger picture and often does not work towards your end financial goal (i.e. reaching retirement comfortably).  In times like these, leaving your capital in cash is a sure-fire way to see the real value of those savings go down over time.

When considering investing or saving for retirement, the key is to navigate the various ups and downs, making decisions during times of market volatility while evaluating risk.  For those new to investing and also those who are experienced, it can be difficult to sit still during bumpy times, especially when the words ‘recession’ and ‘inflation’ are constantly popping up in the news.

It is important to remember that an investment plan is created with an endpoint, which does not change – although how you get there might.  You may have to stop, regroup or alter the plan.  Patience is a virtue, and there are many ways to navigate different market positions.

Tips to navigate a volatile market