By Michael Doyle
This article is published on: 14th October 2024
It has been a tough couple of years in the financial markets – there is no getting away from that.
Mortgage interest rates have rocketed (although 3% isn’t too bad, depending on the era in which you mortgaged your first property). For savers rather than borrowers, some banks in France have started offering close to 3% returns on cash deposit accounts (mostly fixed term deposits, i.e. you don’t touch your funds for 2-3 years).
When I first started in financial services in 1998 one of my mentors said to me:
“Michael, always ask this question: Who does it benefit?”
Why would banks give you 3%? Who does it benefit that you tie up your funds for 2-3 years? Will you outperform inflation? Is your money safe (what is the bank’s guarantee)?
I just listened to the late, great Jim Rohn and he said there are two different types of pain:
There’s the pain of discipline and the pain of regret.
So which pain do you prefer?
Yes, the markets have performed poorly over the past couple of years (https://spectrum-ifa.com/russias-invasion-and-its-effects-on-markets/) – so can you remain disciplined?
At Spectrum we don’t generally advise on short term investing (less than 5 years). To that extent we ask and encourage our clients to be disciplined.
Here’s what we know (https://spectrum-ifa.com/time-not-timing-investing-for-the-long-term/).
I can’t tell you when markets will recover, but I do know that there will be a recovery (this is certain) and typically assets then to go on to achieve higher valuations than achieved previously.
Is now a good time to invest? If you have a medium to long-term time horizon, it definitely becomes an interesting conversation. Whatever is going on around us (and whatever is in the new headlines), discipline and patience really do pay when it comes to investment decisions.
If you are hoping to pre-empt short term market direction (with a view to buying in at low point), I’d be inclined to say investing is probably not for you right now. Could this mean that you will miss a ‘rebound’ in the markets? Quite possibly, with the inevitable regret that follows.
Either way, if you’d like to discuss suitable investment planning for your circumstances, please feel free to drop me an email and we can set up an initial no obligation chat.
