Welcome to the Financial Column in association with Money Plus, Bridge Street, Boyle
Q. I have had some money invested in an investment fund for the last four years and I had been very pleased with the growth on it each year. However I got my annual statement recently and the valuation has fallen significantly. I am advised that this is due to the volatility in the markets. I’m concerned that I will lose everything I gained up to now. What can I do to prevent this?
A. Equity markets have had considerable volatility since around May last year and, as a result, most investment funds that invest some or all of their assets in shares, have seen the value of the investments which they manage, fall as a result. There are a number of reasons which have contributed to this volatility – some of these include the Euro crisis and the danger of a Greek default, the slowdown in the Chinese economy and the crash in Chinese equities, the fall in the price of oil and commodity prices, along with the recovery in share prices since 2009 which has led to some profit taking. The first few weeks of 2016 have seen a continuation of this volatility and some quite pessimistic commentaries about the short term outlook for markets from some analysts.
We would expect volatility to continue for the present and there is no guarantee that the value of your investment fund could fall further. However we do not see this as a reason to panic and the current volatility may result in good investment opportunities.
So what are the options if you are concerned that you could lose all that you have gained in the last four years ?
It’s difficult to give definitive advice without knowing more about your specific circumstances such as:
What type of investment fund you are invested in and what type of risk does it carry?
What are your particular objectives and expectations for your investment ?
How long you intend to have your money invested for ?
What level of risk are your prepared to take/are comfortable with in your investment decisions?
The first thing that I would advise is to arrange a meeting with an independent financial adviser (such as Money Plus) who specialises in providing investment advice, to review your investment fund in the context of the above questions. The experienced advisers at Money Plus can advise you accordingly on the most suitable recommended action for you.
In general terms, if your objectives, risk profile and timeframe remain the same, and if your current investment portfolio reflects these, then you should remain invested in the same portfolio. Short term market volatility is to be expected in a medium/long term investment portfolios with exposure to equities. It is important not to be unnerved when values fall as you could end up cashing in or switching to a more cautious investment fund as you could be switching out near the bottom of the markets and lose out when markets recover.
This is why we believe it is important to get independent impartial investment advice before making a decision that could have a significant impact on your long term investment objectives. In this regard Belinda McCauley in Money Plus, Bridge St, Boyle would be delighted to assist you. Belinda can be contacted at 071-9194000/ 086-7847827 or by email: [email protected]
Boyletoday.com/MoneyPlus accept no responsibility for any decisions taken as a result of advice provided in this column. A reliable recommendation can only be made following a full detailed consultation taking an individual particular circumstances into consideration