Markets have been given an unusually constant battering over the past few years i.e. Gilts are guaranteed long term loans to the government that feature in your investment, seen as bringing stability to pension/investment portfolios.
However, first BREXIT followed by the COVID PANDEMIC, Putin’s ill-fated vanity project in Ukraine, then Liz Truss/Kwasi Kwarteng reckless handling of the UK economy during their brief time in charge have caused an upward spike in interest rates/inflation leading to a big drop in the price of Gilts due to market uncertainty in the competence of this less than dynamic duet. Thankfully, their time in charge, although hugely damaging, was brief. The markets have started to steady since their departure coupled with a gradual recovery.
This can be demonstrated in enclosed fund factsheet showing market peaks and lows. The recovery will gather pace as interest rates, then inflation gradually drift back to normal levels over the coming months. Therefore, it is worth remembering that market fluctuations are a normal part of the investment cycle causing the value of funds to fall & rise on occasion. There will always be bumps along the road, we can’t prevent these but can navigate a path through by using diversified multi-asset funds with the ability to reduce, absorb the impact of market falls then recover and continue to provide growth in the long term. I have enclosed a summary of a quality diversified multi-asset fund measured over a 5yr period including highs & lows to demonstrate this effect. Moral of the story is to always keep your head when everyone else is losing theirs.
Risks: The value of investments may fluctuate which will cause fund prices to fall as well as rise and investors may not get the original amount invested. The performance information presented on this page relates to the past. Past performance is not a reliable indicator of future returns.
