A recent message to all our clients:
It has been a torrid year for investments and investors there can be no doubt about that – 98% of the time you can expect better return than we have had so far this year. This is my first crumb of comfort.
For the first time in more than a decade our resolve is being tested to the extreme. Although more extreme, the Covid crash was mercifully brief. This year has been more akin to the financial crisis and its aftermath.
Crumb 2 – there is nothing unusual, exceptional or unexpected about what has been going on – this is par for the course. Although the causes always differ, poor returns are part and parcel of the investment journey. To benefit from the good times, we must endure the bad times.
Crumb 3 – At all times, good and bad, we should remind ourselves that 75% of the time your investments are gaining in value, that every year we should expect a decent drop in values followed by a recovery and every five years a much larger drop followed by a recovery.
Crumb 4 – In every respect it is NOT different this time. Now maybe a good time to re-read this guide to investing: https://www.townclosefp.co.uk/resources/4-aspects-investments/
Crumb 5 – It has been said that it is darkest before dawn. If you scratch beneath the neanderthal headlines of the popular press you can discern the first few green shoots of the next upturn. For example, we are towards the end of the US (the market leader) increasing interest rates and inflation expectations are coming down.
Crumb 6 – There is a plethora of market indicators that point towards better times – put simply, real people with real money are doing things that would only be done if they were becoming optimistic. As opposed to the talking heads spouting febrile nonsense but not putting their money where their mouths are.
Crumb 7 – Please be reminded that we have crafted for each and every one of you a plan and strategy that protects you from the worst of any short-term turbulence and gives you the best chance to benefit from the long-term growth of the global economy.
Or, put simply again, you all have 2-3 years spending money set aside, safe and sound in cash and sure/guaranteed income – precisely for times like these.
With the balance you are owners of the biggest, best financed, most profitable and successful companies known to man. These are the companies that provide all the goods and services you need and enjoy. They employ hundreds of millions of people determined to do their very best every day to provide for their families. To stop being owners of such valuable long-term assets would be financial suicide.
Crumb 8 – This approach to you and your family’s well-being continues to make perfect sense to me and I have full confidence in it. To abandon our approach would be reckless. Your time and patience will be rewarded amply, but as that statement suggests it will take time.
Crumb 9 – We do not, and never will, hide at times like this. It is at times like this, the darkest hours, that we earn our plan management fees in spades with calm reassurance and to help you avoid making a terrible mistake and panicking.
If you would like a chat, please feel free to arrange a Zoom with me using the usual link.