If you are in investor, you don’t need reminding that the markets are volatile right now.
There has been something of a recovery in stock markets since back in June, but it might still be a good time to review your portfolio – and make any changes you think necessary.
At Continuum we look at three actions to help make sure your investments are in good shape.
1. Understand what is driving the markets
For the past few years, Covid has been driving the markets – and providing a roller coaster ride. The worst victims of the Covid sell-off in early 2020 started to recover almost immediately, when investors realised that they weren’t going bankrupt and eventual recovery looked possible after all.
The shares that bounce back fastest are usually those that went down most, and the recovery was dramatic. Unfortunately for many sectors it was also short lived. Air travel, was down and everything from holiday companies to aeroengine makers like Rolls-Royce, suffered major, and sometimes fatal downturns.
The retail sector was also seriously affected. Some names like Debenhams have disappeared from the high street.
On the other hand, home delivery businesses enjoyed a boom.
But the world has moved on, and the three factors affecting markets now seem to be a recovery that has overheated, causing supply chain problems around the world, the war in Ukraine, which is threatening the world’s energy and food markets – and a loss of confidence, caused by a fear of recession.
A great way to understand what is driving the markets and learn more about the world of finances is to sign up to our free educational newsletter today.
The one thing that you can be sure of in the current economic climate is that nobody actually has the power to see the future.
However, spreading your money across different investments could be a sensible approach.
The more variety you can build into your investment portfolio, or the greater the diversification, may lower the potential overall risk.
The basic idea behind diversification is that you have enough investments that perform consistently to balance out, or outweigh, the performance of your investments that don’t.
3. Get some expert help
It’s tempting to do nothing when you don’t know what to do, but it could be a mistake if it means holding on to losers and not making the most of winners.
It could be time to get some expert help with your portfolio. At Continuum we can discuss your investment strategy, understand your personal and financial ambitions and create a bespoke approach to suit your needs.
When investing your capital is at risk.
The value of your investment can go down as well as up and you may not get back the full amount of invested.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice, you should seek independent financial advice before embarking on any course of action.