“I’ve got a plan so cunning you could put a tail on it and call it a weasel.”
That’s what Rowan Atkinson famously said as Blackadder in an episode of the TV series he wrote. Blackadder and Baldrick always had a cunning plan – and so do we here at Tucana.
Stick to the plan
- We know the market will reward patient investors.
- Do not let short-term noise interfere with your investment decisions.
- Simply keep calm and carry on.
You cannot help but notice the hysteria in the media about the results of the recent EU referendum. On Friday 23 June when the result was announced, all hell broke loose. The stock markets dropped instantly (but temporarily).
BBC News said the result had triggered “financial market turmoil across the globe”.
CBS News reported the exit vote “sent shockwaves through global markets”.
The FTSE 100 fell 3.25% on the day.
Never-ending economic, political and business news can induce anxiety and fear, leaving investors confused about the best course of action to take.
We’re not the only advisers urging patience.
“This is not 2008 and the worst thing investors can do is to panic and sell out,”
Economist, Burt Malkiel, author of ‘A Random Walk Down Wall Street’
“Don’t do something. Just stand there. Don’t be distracted by market opinions, stampedes and foolishness. So do nothing.”
Founder of the Vanguard Group, Jack Bogle
“If you’re a longer term investor I don’t think you have to do anything, at least right now. You also run the risk of making some irrational decisions if you move immediately.”
David Joy, chief market strategist, Ameriprise
Your questions answered
Happily, Tucana clients know we have a plan, and are too sensible to panic.
Rather than being deluged with enquiries, we’ve only had a couple of phone calls since the vote.
One person was worried about the news and asked if we thought things could get any worse. He knew we have a 10-year plan for his investments, and didn’t want to sell them. We were able to reassure him that it is not the instant end of capitalism and it is still safe to invest in the markets.
Another client asked if it was a good time to invest. We reassured him that it is best to stick to the plan we have set out for him, which was to use up his ISA and pension allowance and then drip feed money into the stock market regularly. His plan doesn’t change just because of the current news.
Our cunning plan
By definition, financial planners do planning, so our lucky clients have other resources to call on in case of emergency.
We make sure that our clients’ investments are diversified across all markets.
We also ensure our clients have liquidity to last them over the next five years or so, and only invest the cash they won’t need into a long-term portfolio. Even if the market does misbehave, they then know they have money they can access to spend.
Putting Brexit into context
As these graphs show, there has been more volatility in the past, without the impact of Brexit.
“The only certainty is that over the long term (since data began around 100 years ago), the trend has continued upwards.”
Nicki Hinton-Jones, CFA, XPM Investment Consulting
Keep calm and carry on
Our investment process provides you with confidence that your long-term aims can be met regardless of short-term panic or exuberance.
We have been sharing this message of constant reassurance for months. For example, see our recent articles:
If you want to speculate, we suggest you put your money on the 3:30 at Kempton.
If you need cheering up, are some Blackadder quotes for you to enjoy: