Stock market uncertainty | Protecting your investments

Protecting your investments through the stock market uncertainty

The combination of stock market volatility, slowing growth in China, falling commodity prices and near-exhausted fiscal stimulation policies has led to a perfect storm of financial uncertainty over this first quarter of 2016. However, with Acumen at your side, you can be certain that we are working hard to protect your investments.

History has delivered many market cycles. The FTSE100 reached a record high back in April last year followed by a period of volatility and heavy falls. This is undoubtedly uncomfortable, but is part and parcel of investing in the stock market.

 

Acumen spreads your investment wider

History shows that timing the market is extremely difficult, even for the best investors in the country. Time in the market is the tried and tested route and one that has worked consistently well for our clients over the long term.

It is also important to stress that, as clients of Acumen, your investments are not directly linked to the FTSE100. All portfolios are invested far more broadly than just the FTSE100 index, which only represents the largest 100 companies in the UK and not necessarily the best.

Depending on your individual risk profile, you will be invested not only in UK shares but overseas shares, as well as fixed interest investments (Bonds), property, and absolute return funds.

We cannot say you have not suffered falls in valuations, but with your investments being well spread and well managed they will certainly not be as dramatic as what we have seen on the FTSE100 index.

Why have markets fallen?

This has been well-documented (and often sensationalised) in the media, but we can point to a couple of factors:

  • Slowing growth in China.
  • Falling commodity prices, particularly oil, have weighed on the markets. Particularly companies in the FTSE100, which contains a large number of oil and commodity producers.
  • Central banks have now used the majority of their tools to stimulate the global economy.

However, it is important to remember that falling energy prices are a boon for consumers and manufacturers alike. The market sell-off has been indiscriminate, and companies with good prospects are now trading at significantly lower valuations than they were a few weeks ago.

Lower energy costs should filter through to both companies and individuals alike, putting more money in people’s pockets to spend and giving the economy a healthy boost.

‘An improving opportunity to generate value’

We don’t know when markets will go up or down,” says Guy Foster, Brewin Dolphin’s Head of Research. “We only know the likely opportunity generally improves as prices fall and declines as they rise. The particularly technical nature of the current volatility gives fundamental investors like us an improving opportunity to generate value for clients

You can read more of Guy’s insights here.

To discuss your financial plans with one of our dedicated team, please contact us today on 0151 520 4353 or email info@acumenfinancial.co.uk.

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