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  • SaidSo Money

Forget Valentines 2021? But maybe some hope?

Wow! There is a lot of noise at the moment from the internet, TV, papers and social media! Gaining real information about what is happening in our rather topsy-turvy world is not as easy as it once was. Where to turn to get balanced updates, both for news, and some global market commentary, amongst others can be really difficult.

Social media? Some love it, some loathe it, however the noise of opinion, and indeed fake news, can be deafening, misleading and sometimes dangerous, asking that opinions are confirmed without good evidence. The economic news across most of the world is not great, but there is some progress out there if you look.

There is no secret that we have moved into February 2021, the month that features Valentine’s Day, in this case in lockdown, which may be a rather muted affair in comparison to years gone by. Perhaps rather un-romantic.

But there is hope for the future, although seeking out better news can be trying. We are aware of investor sentiment from some at the beginning of 2021 who have enquired about pension, ISA and investment fund values, having decided not to ask too much in the latter months of 2020, with the press reporting big falls in March 2020. We have not seen market volatility of this magnitude since the global economic crash of 2008.

It is interesting to note a contact’s relief, even surprise, when looking at current fund values. In their words, “the statements look healthier than we expected”. Great news, which brings hope for their future financial planning objectives.

Investment and pension planning are normally about the longer term, and many understand this to be five years plus. Short term volatility is to be expected, and part of the financial planning process is understanding the client’s attitude to investment risk, and ability to accept losses. Managing expectations is vital.

Holding tight on existing investment positions when markets see significant volatility is usually recommended, with many fund values now having returned to close on their positions this time last year (2020). Selling on a decline in the value of a holding can crystallises losses, and if the sale is sentiment led (rather than for a specific need), this is not normally recommended.

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