Keith Parkinson – Independent Financial Adviser at Continuum
Uncertainty causes emotions to be triggered, ranging from anxiety to fear, depending on how you manage to control your feelings.
To explain this, we all started a new school at some point during our younger years, even if it was only the transition from Junior school to Senior school, moving up from our comfortable surroundings, which we had grown to know, to a school where we didn’t know where things were and how things ran, it’s a change and therefore made us feel uncertain.
This feeling is repeated at various moments of our life’s, changing Job, moving home, even ending a relationship, all of these events cause that feeling of uncertainty and most of us don’t like the emotions it triggers.
So, we seek guidance, speak to friends and family, talk about what we are feeling and what we are worrying about, we look for reassurance, to be able to reduce the emotion caused by our uncertainty to a level that we feel is more comfortable.
Financial Markets suffer from the same feelings during periods of uncertainty; therefore, they do the same, they look for certainty and wait until somebody has provided them with reassurance and to know how things will be.
We have had in the last five years the uncertainty caused by BREXIT, COVID, War in Eastern Europe, the Energy crisis and now the current political turmoil within the UK, so its no surprise that the markets are showing volatility and the news reports have been biased towards the negatives.
This feeling has then spread to us as individuals and triggers the same emotions within us associated with any other uncertain situation, so we suggest that you realise how you feel and do the same as if it was a personal situation, seek advice, obtain guidance, and learn how your feelings can be changed by receiving reassurance.
Interest rates have been a particular hot bed for discussion recently, seeing people clamber for five-year fixed rates, which currently sit at circa 6.5%, but the Bank of England base rate sits at 2.25%. Agreed rates are likely to increase, but by taking a fixed rate now, are you allowing your emotions to make that decision for you or are you seeking advice? You could look at your budget and realise how much your mortgage will increase if rates go up by 0.5%, 1% or even 2%. If you aren’t reviewing the true costs of interest rate increments and are just making an emotional decision, you are now agreeing to pay 4.25% more than the Bank of England’s current base rate for the next five years.
So, why not consider seeking advice and assistance? We are there to help.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to a particular mortgage product and you should seek independent financial advice before embarking on any course of action.
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