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Market Update: May 2022 Posted on May 9, 2022
Article by David Evers
It is times like this that the importance of quality advice really comes to the surface.
When it was appearing that we were coming to an end of the worst period of the pandemic’s economic challenges, circumstances changed again. Now, thanks to a combination of Putin’s war in Ukraine, rising inflation, and more Covid-19 cases, countries around the world are facing significant challenges, and their own unique individual economic weaknesses.
Significant market volatility has returned at levels not seen since the Global Financial Crisis, and it is likely to continue.
Our client’s investment portfolios have been deliberately constructed to weather short term financial “storms”. We will continue to sensibly focus on your plan to achieve your long-term goals. We have been cautious in our approach to investment leading up to this period of volatility.
We should track progress toward your retirement savings goal, not short-term performance.
While periods of heightened volatility will come and go, retirement savings such as superannuation are a long-term investment. Stick to your plan. It can be uncomfortable to stay the course when markets fall yet doing so can result in greater accumulated wealth over time.
Diversified investments will help reduce risk and the impact of share market volatility. Large exposure to a single asset class or a particular type of investment means that you are more exposed to fluctuations. If your investments are spread across a range of sectors or investment types, you are less likely to see a drop in your overall portfolio balance.
Shut out the noise. It is easy to be distracted when headlines focus on falls in the share market. When this happens, remind yourself that volatility is a normal part of investing. History shows that financial markets fluctuate and then recover.
We are watching events closely and are keeping up to date with the views of experts. If you have questions, or concerns, please contact us. We are here to support you.