{"id":7429,"date":"2022-05-02T12:07:00","date_gmt":"2022-05-02T02:37:00","guid":{"rendered":"https:\/\/adelaideprivatewealth.com.au\/staying-passive-is-being-active\/"},"modified":"2022-05-02T12:07:00","modified_gmt":"2022-05-02T02:37:00","slug":"staying-passive-is-being-active","status":"publish","type":"post","link":"https:\/\/adelaideprivatewealth.com.au\/staying-passive-is-being-active\/","title":{"rendered":"Staying passive is being active"},"content":{"rendered":"
Heightened global markets volatility \u2013 as we\u2019re experiencing right now \u2013 can easily trigger kneejerk reactions by panicked investors.<\/p>\n
Widespread selling, triggered by the Russia-Ukraine crisis, has been behind the recent big swings on global financial markets, including on stock markets, commodities markets, and currency markets.<\/p>\n
As serious as the current events are, heightened markets volatility is nothing new. Think back to around this time two years ago when the onset of the COVID-19 pandemic also triggered major falls on global markets.<\/p>\n
In March 2020, the Australian share market dropped more than 35 per cent over about 20 trading sessions to reach its lowest level in more than a decade.<\/p>\n
Very soon after, it and other global financial markets staged a quick and very strong rebound.<\/p>\n
By the end of 2020 share markets were back near record levels, and last year they continued to build momentum.<\/p>\n
Those investors who didn\u2019t panic at the time, and who chose to ride through all that early 2020 markets volatility, and who have remained invested ever since, have been well rewarded with both capital and income growth over time.<\/p>\n
In volatile market conditions, not doing anything at all \u2013 staying the course \u2013 is generally the best investment strategy overall.<\/p>\n
1. Failing to have a plan<\/strong><\/p>\n Investing without a plan is an error that invites other errors, such as chasing performance, market-timing, or reacting to market \u201cnoise\u201d driven by media headlines. Such temptations multiply during downturns, as investors looking to protect their portfolios seek quick fixes.<\/p>\n 2. Fixating on losses<\/strong><\/p>\n Market downturns are normal, and most investors will endure many of them. Unless you sell, the number of shares you own won\u2019t fall during a downturn. In fact, the number will grow if you reinvest your funds\u2019 income and capital gains distributions. And any market recovery should revive your portfolio too.<\/p>\n 3. Overreacting or missing an opportunity<\/strong><\/p>\n In times of falling asset prices, some investors overreact by selling riskier assets and moving to government securities or cash equivalents. But it\u2019s a mistake to sell risky assets amid market volatility in the belief that you\u2019ll know when to move your money back to those assets.<\/p>\n Trying to time markets is virtually impossible. Just being invested in the market, and making ongoing contributions, will ensure you never miss out on long-term growth.<\/p>\n If you\u2019re unsure about your current investment portfolio, call us today to discuss a strategy for you on [phone].<\/p>\n Source: Vanguard March 2022<\/a><\/span><\/p>\n Reproduced with permission of Vanguard Investments Australia Ltd<\/p>\n Vanguard Investments Australia Ltd (ABN 72 072 881 086 \/ AFS Licence 227263) is the product issuer. We have not taken yours and your clients\u2019 circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our\u00a0PDS\u00a0or\u00a0Prospectus\u00a0online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.<\/p>\n \u00a9 2022 Vanguard Investments Australia Ltd. All rights reserved.<\/p>\n Important: The post Staying passive is being active<\/a> appeared first on MLC Contemporary<\/a>.<\/p>\n<\/div>\nTime in the markets is what counts<\/h3>\n
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